DMC Global Reports Fourth Quarter and Full-Year Financial Results

Broomfield, Colorado, UNITED STATES


  • Fourth quarter sales were $57.1 million, up 3% sequentially and down 34% versus Q4 2019
  • DynaEnergetics reports 24% sequential increase in North America sales, offsetting soft international demand; NobelClad sales up 3% sequentially
  • Fourth quarter gross margin was 21% versus 25% in Q3 2020 and 35% in Q4 2019
  • Fourth quarter net loss was $927,000, or $0.06 per diluted share
  • Fourth quarter adjusted net loss was $825,000, or $0.05 per diluted share
  • Fourth quarter adjusted EBITDA* was $3.6 million
  • Full-year sales were $229.2 million, down 42% from 2019
  • Full-year net loss was $1.4 million, or $0.10 per diluted share, while adjusted net income* was $1.0 million, or $0.07 per diluted share
  • Year-end cash and marketable securities were $53.9 million, including $25.7 million raised through an at-the-market equity program initiated during the fourth quarter

BROOMFIELD, Colo., Feb. 18, 2021 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its fourth quarter and fiscal year ended December 31, 2020.

Fourth quarter sales were $57.1 million, up 3% sequentially versus the 2020 third quarter, and down 34% versus the 2019 fourth quarter. The decline versus last year’s fourth quarter reflects the pandemic-related drop in travel and economic activity, which reduced demand for oil and gas, negatively affecting sales at DynaEnergetics, DMC’s energy products business. Fourth quarter gross margin was 21% versus 25% in the third quarter and 35% in the prior-year fourth quarter. The sequential decline principally reflects an anticipated less-favorable order mix at NobelClad, DMC’s composite metals business.

Fourth quarter operating loss was $818,000 versus operating income of $499,000 in the 2019 fourth quarter. Net loss was $927,000, or $0.06 per diluted share, versus a net loss of $5.3 million, or $0.36 per diluted share, in the prior-year fourth quarter. The 2019 fourth quarter was impacted by $13.2 million in restructuring charges ($12.1 million of which were non-cash) principally related to the closure of DynaEnergetics’ manufacturing plant in Tyumen, Siberia.

Adjusted operating loss* was $736,000, and excludes $82,000 in restructuring charges. Adjusted operating income in last year’s fourth quarter was $13.8 million. Adjusted net loss*, which excludes the restructuring charges, was $825,000, or $0.05 per diluted share. Adjusted net income* in the 2019 fourth quarter was $9.5 million, or $0.65 per diluted share.

Fourth quarter adjusted EBITDA was $3.6 million versus $6.0 million in the 2020 third quarter and $17.6 million in the 2019 fourth quarter. Cash flow from operations was $9.0 million versus $29.5 million in the prior-year fourth quarter.

Net cash* (cash, cash equivalents and marketable securities less total debt) was $42.6 million versus $12.6 million at the end of the 2020 third quarter and $6.1 million at December 31, 2019. Total debt was $11.3 million, and the Company’s debt-to-adjusted EBITDA leverage ratio was 0.6.

DynaEnergetics
DynaEnergetics reported fourth quarter sales of $35.3 million, up 3% sequentially and down 45% versus the prior-year fourth quarter. Sales in North America increased 24% sequentially, while international sales declined 55% from the third quarter. Gross margin was 24% versus 24% in the 2020 third quarter and 38% in the 2019 fourth quarter. Adjusted EBITDA was $4.1 million versus $18.5 million in the 2019 fourth quarter.

NobelClad
NobelClad reported fourth quarter sales of $21.8 million, up 3% sequentially and flat versus the 2019 fourth quarter. Gross margin was 18%, down from 26% in the 2020 third quarter and 27% in the prior-year fourth quarter. Adjusted EBITDA was $1.9 million versus $2.4 million in the prior-year fourth quarter.

NobelClad’s trailing 12-month book-to-bill ratio at the end of the fourth quarter was 1.05. Order backlog was $39.9 million versus $42.6 million at the end of the third quarter and $31.7 million at the end of the 2019 fourth quarter.

Full-year results
Consolidated sales in 2020 were $229.2 million, down 42% from $397.6 million in 2019. Gross margin was 25% versus 36% in the prior year.

Operating loss was $996,000 versus operating income of $58.4 million in 2019. Excluding $3.4 million in restructuring charges, 2020 full-year adjusted operating income was $2.4 million versus adjusted operating income of $78.7 million in 2019.

Full-year 2020 net loss was $1.4 million, or $0.10 per diluted share, while full-year adjusted net income was $1.0 million, or $0.07 per diluted share. Net income in 2019 was $34.0 million, or $2.28 per diluted share, while 2019 adjusted net income was $55.6 million, or $3.75 per diluted share.

Full-year adjusted EBITDA was $19.1 million versus $93.8 million in 2019.

Cash flow from operations was $30.4 million, which excludes $13.9 million in capital expenditures. In 2019, cash flow from operations was $64.6 million, and excluded $27.2 million in capital expenditures.

DynaEnergetics
Full-year sales at DynaEnergetics were $146.4 million, down 53% from $310.4 million in 2019. Gross margin was 26%, down from 40% in the prior year. Adjusted EBITDA was $16.3 million versus $94.5 million in 2019.

NobelClad
NobelClad reported full-year sales of $82.8 million, down 5% from $87.1 million in 2019. Gross margin was 23% versus 26% in the prior year. Adjusted EBITDA was $10.7 million versus $11.1 million in 2019.

Management Commentary
Kevin Longe, president and CEO, said, “The recovery in unconventional well-completion activity accelerated during the fourth quarter, and fueled a 21% sequential increase in system sales at DynaEnergetics. Improved demand in DynaEnergetics’ primary North American market offset soft international sales, which we expect to increase during this year’s second half.

“DynaEnergetics is receiving positive feedback on several of its recently released products, including the DS LoneStar™, a compact perforating system incorporating next-generation shaped charges that deliver large, deep-penetrating and highly uniform entry holes. Data from three recent field trials showed the DS LoneStar charges achieved 98% perforating efficiency, meaning nearly every perforating tunnel delivered fluid and proppant into the targeted formations. Competitors’ best-performing perforating guns typically achieve perforating efficiency in the 80% to 85% range.

“The technologically advanced customers that tested DS LoneStar said the system delivered consistent hydraulic fracturing treatment across its entire asset, and reduced the required pressure-pumping horsepower by more than 20%. The DS LoneStar system also completed the trial with no misruns or misfires, illustrating the safety and performance benefits of the IS2™ intrinsically safe initiating system, which serves as the technological core of all DS products.”

Longe added, “Despite last year’s downturn, we continued to invest in technology and products that enhance the safety, efficiency and performance of our customers’ operations. DynaEnergetics was awarded 24 patents and filed 131 patent applications during 2020. We intend to aggressively protect and defend our intellectual property, as it is central to our efforts to create value for our customers and enhance the longer-term viability of our industry.”

Longe continued, “NobelClad’s late-cycle end markets generally lag changes in the broader economy, which likely will result in a relatively slow start to 2021. We believe several large international orders delayed by the pandemic will ultimately be awarded; and given the numerous new applications NobelClad has developed for its composite metal plates, the medium- to long-range outlook for the business remains positive. NobelClad’s order backlog at the beginning of the year was roughly 25% higher than at the beginning of 2020, and the associated contribution margins were a healthy 44%.

“Our primary energy markets have improved in recent months, and we entered 2021 with the strongest balance sheet in DMC’s history. Our at-the-market equity program is providing added financial flexibility as we explore opportunities to accelerate our growth and deliver strong, sustainable returns for our stakeholders.”

“I am extremely proud of our employees and their accomplishments during the most challenging year in Company history,” Longe added. “Thanks to the determination and innovative spirit of our global workforce, DMC has never been stronger or more resilient.”  

Guidance
Michael Kuta, CFO, said first quarter 2021 sales are expected to be in a range of $55 million to $62 million versus the $57.1 million reported in the 2020 fourth quarter. At the business level, DynaEnergetics is expected to report sales in a range of $37 million to $42 million versus the $35.3 million reported in last year’s fourth quarter.  The wide forecasted range reflects uncertainty regarding the timing of order deliveries following this week’s severe winter weather in Texas, DynaEnergetics’ largest geographic market. NobelClad’s sales are expected in a range of $18 million to $20 million versus the $21.8 million reported in the 2020 fourth quarter. Consolidated gross margin is expected to be in a range of 22% to 24% versus 21% in last year’s fourth quarter.

First quarter selling, general and administrative (SG&A) expense is expected in a range of $12.5 million to $13 million versus the $12.5 million reported in the 2020 fourth quarter, while amortization expense is expected to be approximately $325,000. Interest expense is expected to be approximately $150,000.

Adjusted EBITDA is expected in a range of $3.5 million to $5 million versus $3.6 million in the fourth quarter of 2020.

“Given the uncertainty regarding timing of the Covid-19 vaccination rollout and its impact on economic activity and energy demand, we are not yet providing full-year sales and earnings guidance. We do expect 2021 capital expenditures will be in a range of $12 million to $15 million. In addition, full-year amortization expense is expected to be approximately $1.1 million versus the $1.4 million reported in 2020; and interest expense is expected to be approximately $425,000, down from the $731,000 reported in 2020.”

Conference call information
Management will hold a conference call to discuss these results today at 5:00 p.m. Eastern (3:00 p.m. Mountain). Investors are invited to listen to a live webcast of the call at: https://www.webcaster4.com/Webcast/Page/2204/39911, or by dialing 888-506-0062 (973-528-0011 for international callers) and entering the code 482102. 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 February 25, 2021, by calling 877-481-4010 (919-882-2331 for international callers) and entering the Conference ID #39911.

*Use of Non-GAAP Financial Measures
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). 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 cash is defined as total cash, cash equivalents and marketable securities less total debt. 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
DMC Global is a diversified holding company. Our innovative businesses provide differentiated products and services to niche industrial and commercial markets around the world. DMC’s objective is to identify well-run businesses and strong management teams and support them with long-term capital and strategic, legal, technology and operating resources. Our approach helps our portfolio companies grow core businesses, launch new initiatives, upgrade technologies and systems to support their long-term strategy, and make acquisitions that improve their competitive positions and expand their markets. DMC’s culture is to foster local innovation versus centralized control, and stand behind our businesses in ways that truly add value. Today, DMC’s portfolio consists of DynaEnergetics and NobelClad, which collectively address the energy, industrial processing and transportation markets. 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 Language
Except 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 first quarter 2021 guidance on sales, gross margin, SG&A, and adjusted EBITDA; first quarter and full-year guidance on amortization expense and interest expense; expected capital expenditures in 2021; our expectations of a significant increase in DynaEnergetics international sales during the 2021 second half; our expectations of a relatively slow start to 2021 at NobelClad, our belief that several large international orders delayed by the pandemic will ultimately be awarded to NobelClad and NobelClad’s positive long-range outlook. 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; as well as 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, 2019. 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.

 
 
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(unaudited)
 
 Three months ended Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
NET SALES$57,113  $55,281  $86,367  3% -34%
COST OF PRODUCTS SOLD44,927  41,688  56,146  8% -20%
Gross profit12,186  13,593  30,221  -10% -60%
Gross profit percentage 21%  25%  35%      
COSTS AND EXPENSES:                 
General and administrative expenses7,406  6,911  9,220  7% -20%
Selling and distribution expenses5,143  4,705  6,944  9% -26%
Amortization of purchased intangible assets373  369  355  1% 5%
Restructuring expenses, net and asset impairments82  143  13,203  -43% -99%
Total costs and expenses13,004  12,128  29,722  7% -56%
OPERATING (LOSS) INCOME(818) 1,465  499  -156% -264%
OTHER EXPENSE:                 
Other expense, net(115) (148) (661) -22% -83%
Interest expense, net(167) (170) (385) -2% -57%
(LOSS) INCOME BEFORE INCOME TAXES(1,100) 1,147  (547) -196% -101%
INCOME TAX (BENEFIT) PROVISION(173) 139  4,741  -224% -104%
NET (LOSS) INCOME(927) 1,008  (5,288) -192% 82%
NET (LOSS) INCOME PER SHARE         
Basic$(0.06) $0.07  $(0.36) -186% 83%
Diluted$(0.06) $0.07  $(0.36) -186% 83%
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                 
Basic14,917,109  14,820,881  14,640,110  1% 2%
Diluted14,917,109  14,820,881  14,640,110  1% 2%
DIVIDENDS DECLARED PER COMMON SHARE$  $  $0.125     


 
 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
NET SALES$229,161  $397,550  -42%
COST OF PRODUCTS SOLD172,308  252,627  -32%
Gross profit56,853  144,923  -61%
Gross profit percentage 25%  36%   
COSTS AND EXPENSES:          
General and administrative expenses29,150  37,976  -23%
Selling and distribution expenses23,863  27,475  -13%
Amortization of purchased intangible assets1,449  1,544  -6%
Restructuring expenses, net and asset impairments3,387  19,503  -83%
Total costs and expenses57,849  86,498  -33%
OPERATING (LOSS) INCOME(996) 58,425  -102%
OTHER EXPENSE:     
Other expense, net(233) (169) 38%
Interest expense, net(731) (1,554) -53%
(LOSS) INCOME BEFORE INCOME TAXES(1,960) 56,702  -103%
INCOME TAX (BENEFIT) PROVISION(548) 22,661  -102%
NET (LOSS) INCOME(1,412) 34,041  -104%
NET (LOSS) INCOME PER SHARE          
Basic$(0.10) $2.29  -104%
Diluted$(0.10) $2.28  -104%
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:          
Basic 14,790,296   14,579,608  1%
Diluted 14,790,296   14,655,350  1%
DIVIDENDS DECLARED PER COMMON SHARE$0.125  $0.29   


DMC GLOBAL INC.
SEGMENT STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(unaudited)
 
DynaEnergetics
                  
 Three months ended Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
Net sales$35,330  $34,201  $64,604  3% -45%
Gross profit8,433  8,194  24,586  3% -66%
Gross profit percentage24% 24% 38%    
COSTS AND EXPENSES:                 
General and administrative expenses2,952  3,176  3,516  -7% -16%
Selling and distribution expenses2,945  2,445  4,119  20% -29%
Amortization of purchased intangible assets271  269  260  1% 4%
Restructuring expenses, net and asset impairments  133  12,744  -100% -100%
Operating income2,265  2,171  3,947  4% -43%
Adjusted EBITDA$4,118  $4,170  $18,472  -1% -78%


 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
Net sales$146,395  $310,424  -53%
Gross profit38,072  122,703  -69%
Gross profit percentage26% 40%  
COSTS AND EXPENSES:          
General and administrative expenses13,116  16,876  -22%
Selling and distribution expenses14,825  17,260  -14%
Amortization of purchased intangible assets1,059  1,162  -9%
Restructuring expenses, net and asset impairments2,922  18,624  -84%
Operating income6,150  68,781  -91%
Adjusted EBITDA$16,335  $94,541  -83%


NobelClad
 
 Three months ended Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
Net sales$21,783  $21,080  $21,763  3% %
Gross profit3,902  5,577  5,786  -30% -33%
Gross profit percentage18% 26% 27%    
COSTS AND EXPENSES:         
General and administrative expenses739  878  1,324  -16% -44%
Selling and distribution expenses2,036  2,106  2,687  -3% -24%
Amortization of purchased intangible assets102  100  95  2% 7%
Restructuring expenses, net and asset impairments82  10  459  720% -82%
Operating income943  2,483  1,221  -62% -23%
Adjusted EBITDA$1,935  $3,372  $2,390  -43% -19%


 
 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
Net sales$82,766  $87,126  -5%
Gross profit19,433  22,840  -15%
Gross profit percentage23% 26%  
COSTS AND EXPENSES:     
General and administrative expenses3,388  4,703  -28%
Selling and distribution expenses8,423  9,683  -13%
Amortization of purchased intangible assets390  382  2%
Restructuring expenses, net and asset impairments346  879  -61%
Operating income6,886  7,193  -4%
Adjusted EBITDA$10,736  $11,118  -3%


DMC GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
(unaudited)
       Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential From year-end
          
ASSETS         
          
Cash and cash equivalents$28,187  $24,604  $20,353  15% 38%
Marketable securities25,736      n/a  n/a 
Accounts receivable, net31,366  34,424  60,855  -9% -48%
Inventories52,573  56,958  53,728  -8% -2%
Other current assets5,448  9,831  9,417  -45% -42%
          
Total current assets143,310  125,817  144,353  14% -1%
          
Property, plant and equipment, net109,411  107,402  108,234  2% 1%
Purchased intangible assets, net3,665  4,383  5,880  -16% -38%
Other long-term assets23,259  21,681  18,954  7% 23%
          
Total assets$279,645  $259,283  $277,421  8% 1%
          
LIABILITIES AND STOCKHOLDERS' EQUITY        
          
Accounts payable$17,574  $22,123  $34,758  -21% -49%
Contract liabilities4,928  5,195  2,736  -5% 80%
Dividend payable    1,866  n/a  -100%
Accrued income taxes7,279  7,080  9,651  3% -25%
Current portion of long-term debt3,125  3,125  3,125  % %
Other current liabilities14,202  16,555  19,287  -14% -26%
          
Total current liabilities47,108  54,078  71,423  -13% -34%
          
Long-term debt8,139  8,867  11,147  -8% -27%
Deferred tax liabilities2,254  3,181  3,786  -29% -40%
Other long-term liabilities25,230  23,206  18,924  9% 33%
Stockholders' equity196,914  169,951  172,141  16% 14%
          
Total liabilities and stockholders' equity$279,645  $259,283  $277,421  8% 1%


DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(unaudited)
 
 Three months ended
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:     
Net (loss) income$(927) $1,008  $(5,288)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:           
Depreciation2,465  2,451  2,138 
Amortization of purchased intangible assets373  369  355 
Amortization of deferred debt issuance costs53  55  48 
Stock-based compensation1,521  1,595  1,296 
Deferred income taxes(1,474) 521  2,629 
Loss on disposal of property, plant and equipment134  114  187 
Restructuring expenses, net and asset impairments82  143  13,203 
Change in working capital, net6,781  3,970  14,930 
Net cash provided by operating activities9,008  10,226  29,498 
CASH FLOWS FROM INVESTING ACTIVITIES:           
Investment in marketable securities(25,740)    
Acquisition of property, plant and equipment(4,171) (2,206) (4,833)
Proceeds on sale of property, plant and equipment16  6  5 
Net cash used in investing activities(29,895) (2,200) (4,828)
CASH FLOWS FROM FINANCING ACTIVITIES:           
Payments on revolving loans    (6,130)
Payments on capital expenditure facility(781) (782) (7,781)
Payment of dividends    (1,866)
Payment of deferred debt issuance costs(2) (4)  
Net proceeds from issuance of common stock through at-the-market offering program25,740     
Net proceeds from issuance of common stock165  3  199 
Treasury stock purchases(767) (55) (24)
Net cash provided by (used in) financing activities24,355  (838) (15,602)
EFFECTS OF EXCHANGE RATES ON CASH115  168  (898)
            
NET INCREASE IN CASH AND CASH EQUIVALENTS3,583  7,356  8,170 
CASH AND CASH EQUIVALENTS, beginning of the period24,604  17,248  12,183 
CASH AND CASH EQUIVALENTS, end of the period$28,187  $24,604  $20,353 


  
 Twelve months ended
 Dec 31, 2020 Dec 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net (loss) income$(1,412) $34,041 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:       
Depreciation9,632  8,316 
Amortization of purchased intangible assets1,449  1,544 
Amortization of deferred debt issuance costs207  178 
Stock-based compensation5,675  5,204 
Deferred income taxes(2,313) 4,289 
Loss on disposal of property, plant and equipment247  530 
Restructuring expenses, net and asset impairments3,387  19,503 
Change in working capital, net13,490  (9,011)
Net cash provided by operating activities30,362  64,594 
CASH FLOWS FROM INVESTING ACTIVITIES:   
Investment in marketable securities(25,740)  
Acquisition of property, plant and equipment(13,853) (27,210)
Proceeds on sale of property, plant and equipment36  1,263 
Net cash used in investing activities(39,557) (25,947)
CASH FLOWS FROM FINANCING ACTIVITIES:       
Payments on revolving loans  (17,129)
Payments on capital expenditure facility(3,125) (10,125)
Payment of dividends(3,749) (2,762)
Payment of deferred debt issuance costs(90)  
Net proceeds from issuance of common stock through at-the-market offering program25,740   
Net proceeds from issuance of common stock431  557 
Treasury stock purchases(1,890) (1,103)
Net cash provided by (used in) financing activities17,317  (30,562)
EFFECTS OF EXCHANGE RATES ON CASH(288) (1,107)
        
NET INCREASE IN CASH AND CASH EQUIVALENTS7,834  6,978 
CASH AND CASH EQUIVALENTS, beginning of the period20,353  13,375 
CASH AND CASH EQUIVALENTS, end of the period$28,187  $20,353 


DMC GLOBAL INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS TO MOST
DIRECTLY 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, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
Net (loss) income$(927) $1,008  $(5,288) -192% 470%
Interest expense, net167  170  385  -2% -131%
Income tax (benefit) provision(173) 139  4,741  -224% -2,840%
Depreciation2,465  2,451  2,138  1% 15%
Amortization of purchased intangible assets373  369  355  1% 5%
                  
EBITDA1,905  4,137  2,331  -54% -22%
Restructuring expenses, net and asset impairments82  143  13,203  -43% -16,001%
Restructuring related accounts receivable write off    131  n/a  n/a 
Stock-based compensation1,521  1,595  1,296  -5% 17%
Other expense, net115  148  661  -22% -475%
                  
Adjusted EBITDA$3,623  $6,023  $17,622  -40% -386%


 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
Net (loss) income$(1,412) $34,041  -104%
Interest expense, net731  1,554  -53%
Income tax (benefit) provision(548) 22,661  -102%
Depreciation9,632  8,316  16%
Amortization of purchased intangible assets1,449  1,544  -6%
           
EBITDA9,852  68,116  -86%
Restructuring expenses, net and asset impairments3,387  19,503  -83%
Restructuring related inventory write down  630  -100%
Restructuring related accounts receivable write off  131  -100%
Stock-based compensation5,675  5,204  9%
Other expense, net233  169  38%
           
Adjusted EBITDA$19,147  $93,753  -80%


 
Adjusted Operating (Loss) Income
 Three months ended Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
Operating (loss) income, as reported$(818)  $1,465  $499  -156% 194%
Restructuring programs:         
DynaEnergetics   133  12,745  -100% -99%
NobelClad82   10  458  720% -98%
Restructuring related accounts receivable write off     131  n/a  -100%
                   
Adjusted operating (loss) income$(736)  $1,608  $13,833  -146% -88%


 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
Operating (loss) income, as reported$(996) $58,425  -102%
Restructuring programs:          
DynaEnergetics2,922  18,631  -84%
NobelClad346  872  -60%
Corporate119    n/a 
Restructuring related inventory write down  630  -100%
Restructuring related accounts receivable write off  131  -100%
           
Adjusted operating income$2,391  $78,689  -97%


Adjusted Net (Loss) Income and Diluted (Loss) Income per Share
 
 Three months ended December 31, 2020
 Pretax Tax Net Diluted weighted
average shares
outstanding
 Diluted EPS
Net loss, as reported$(1,100) $(173) $(927) 14,917,109  $(0.06)
Restructuring programs:                  
NobelClad82  (20) 102  14,917,109  0.01 
                   
Adjusted net loss$(1,018) $(193) $(825) 14,917,109  $(0.05)


 
 Three months ended September 30, 2020
 Pretax Tax Net Diluted weighted
average shares
outstanding
 Diluted EPS
Net income, as reported$1,147  $139   $1,008  14,820,881  $0.07 
Restructuring programs:                   
DynaEnergetics133  (39)  172  14,820,881  0.01 
NobelClad10  3   7  14,820,881   
                    
Adjusted net income$1,290  $103   $1,187  14,820,881  $0.08 


 Three months ended December 31, 2019
 Pre-Tax Tax Net Diluted weighted
average shares
outstanding
 Diluted EPS
Net loss, as reported$(547) $4,741  $(5,288) 14,640,110  $(0.36)
Restructuring programs:                  
DynaEnergetics12,745  160  12,585  14,640,110  0.86 
NobelClad458  4  454  14,640,110  0.03 
Restructuring related accounts receivable write off131    131  14,640,110  0.01 
Impact of tax valuation allowances  (1,647) 1,647  14,640,110  0.11 
                   
Adjusted net income$12,787  $3,258  $9,529  14,640,110  $0.65 


 Twelve months ended December 31, 2020
 Pre-Tax Tax Net Diluted weighted
average shares
outstanding
 Diluted EPS
Net loss, as reported$(1,960) $(548) $(1,412) 14,790,296  $(0.10)
Restructuring programs:                  
DynaEnergetics2,922  863  2,059  14,790,296  0.14 
NobelClad346  56  290  14,790,296  0.02 
Corporate119  25  94  14,790,296  0.01 
                   
Adjusted net income$1,427  $396  $1,031  14,790,296  $0.07 


 
 Twelve months ended December 31, 2019
 Pre-Tax Tax Net Diluted weighted
average shares
outstanding
 Diluted EPS
Net income, as reported$56,702  $22,661  $34,041  14,655,350  $2.28 
Restructuring programs:         
DynaEnergetics18,625  239  18,386  14,655,350  1.25 
NobelClad873  33  840  14,655,350  0.06 
Restructuring related inventory write down630  109  521  14,655,350  0.04 
Restructuring related accounts receivable write off131    131  14,655,350  0.01 
Impact of tax valuation allowances  (1,647) 1,647  14,655,350  0.11 
          
Adjusted net income$76,961  $21,395  $55,566  14,655,350  $3.75 


 
Return on Invested Capital  
   
  Three months ended
  Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020
Operating income (loss)   $499  $6,347  $(7,990) $1,465  $(818)
Income tax provision (benefit) (1)   5,227  2,107  (2,509) 177  (54)
Net operating (loss) profit after taxes (NOPAT)   (4,728) 4,240  (5,481) 1,288  (764)
Trailing Twelve Months NOPAT         (4,681) (717)
           
 Balances as of
 Sep 30, 2019Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020
Allowance for doubtful accounts$405 $967  $2,320  $2,882  $2,709  $2,605 
Deferred tax assets(3,431)(3,836) (3,902) (4,157) (4,070) (4,582)
Deferred tax liabilities1,469 3,786  3,692  2,747  3,181  2,254 
Accrued income taxes10,427 9,651  8,666  5,727  7,080  7,279 
Current portion of lease liabilities1,944 1,716  1,618  1,846  1,804  1,741 
Long-term portion of lease liabilities9,487 9,777  9,454  10,430  10,155  10,066 
Current portion of long-term debt3,125 3,125  3,125  3,125  3,125  3,125 
Long-term debt25,010 11,147  10,406  9,595  8,867  8,139 
Total stockholders' equity167,076 172,141  173,689  170,283  169,951  196,914 
Total invested capital215,512 208,474  209,068  202,478  202,802  227,541 
Average invested capital 195,276  206,300  210,010  209,157  218,008 
                       
Trailing Twelve Months Return on Invested Capital (ROIC)18% 12% 1% (2%) %


(1) Tax calculation for NOPAT:  
 Three months
ended
 Twelve months
ended
 Three months ended Twelve
months ended
 Dec 31, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Dec 31, 2020
(Loss) income before income taxes$(547) $56,702  $6,224  $(8,231) $1,147  $(1,100) (1,960)
Income tax provision (benefit)4,741  22,661  2,069  (2,583) 139  (173) (548)
Effective tax rate(866.7)% 40.0% 33.2% 31.4% 12.1% 15.7% 28.0%


DynaEnergetics   
    
Adjusted EBITDA   
    
 Three months ended Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
Operating income, as reported$2,265  $2,171  $3,947  4% -43%
Adjustments:         
Restructuring expenses, net and asset impairments  133  12,744  -100% -100%
Restructuring related accounts receivable write off    131  n/a  -100%
          
Adjusted operating income2,265  2,304  16,822  -2% -87%
Depreciation1,582  1,597  1,390  -1% 14%
Amortization of purchased intangible assets271  269  260  1% 4%
          
Adjusted EBITDA$4,118  $4,170  $18,472  -1% -78%


 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
Operating income, as reported$6,150  $68,781  -91%
Adjustments:     
Restructuring expenses, net and asset impairments2,922  18,624  -84%
Restructuring related inventory write down  630  -100%
Restructuring related accounts receivable write off  131  -100%
      
Adjusted operating income9,072  88,166  -90%
Depreciation6,204  5,213  19%
Amortization of purchased intangible assets1,059  1,162  -9%
      
Adjusted EBITDA$16,335  $94,541  -83%


NobelClad
 
Adjusted EBITDA
    
 Three months ended Change
 Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 Sequential Year-on-year
Operating income, as reported$943  $2,483  $1,221  -62% -23%
Adjustments:         
Restructuring expenses, net and asset impairments82  10  459  720% -82%
          
Adjusted operating income1,025  2,493  1,680  -59% -39%
Depreciation808  779  615  4% 31%
Amortization of purchased intangible assets102  100  95  2% 7%
          
Adjusted EBITDA$1,935  $3,372  $2,390  -43% -19%


 Twelve months ended Change
 Dec 31, 2020 Dec 31, 2019 Year-on-year
Operating income, as reported$6,886  $7,193  -4%
Adjustments:     
Restructuring expenses, net and asset impairments346  879  -61%
      
Adjusted operating income7,232  8,072  -10%
Depreciation3,114  2,664  17%
Amortization of purchased intangible assets390  382  2%
      
Adjusted EBITDA$10,736  $11,118  -3%
           

 

CONTACT:
Geoff High, Vice President of Investor Relations
303-604-3924