DMC Global (BOOM) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached $171.2M, up 3% sequentially but down 9% year-over-year, with adjusted EBITDA of $19.4M, exceeding guidance despite ongoing market weakness in construction and energy sectors.

• Adjusted net income attributable to DMC was $5.7M ($0.29/share); net income attributable to DMC was $4.0M, down 71% year-over-year.

• Arcadia drove sequential rebound with improved operational efficiencies and cost reductions, while DynaEnergetics and NobelClad faced mixed results.

• Board continues to evaluate strategic options, including potential divestitures, with $2.0M in related Q2 expenses.

• Cash and cash equivalents at June 30, 2024 were $14.6M, with net debt at $69.5M.

Financial highlights

• Gross margin improved to 27.1% sequentially, but down from 32.8% year-over-year.

• Adjusted EBITDA before NCI allocation was $24.4M (14.3% of sales), up 28% sequentially but down 36% year-over-year.

• Net income for Q2 2024 was $6.3M, compared to $17.5M in Q2 2023.

• SG&A expense reduced to $27M, or 15.8% of sales, down from $29M and 15.5% of sales year-over-year.

• Free cash flow for Q2 2024 was negative $0.1M.

Outlook and guidance

• Q3 2024 consolidated sales expected between $158M and $168M; adjusted EBITDA forecasted at $15M–$18M.

• Full-year 2024 guidance: depreciation/amortization $35M–$36M, interest expense $16M–$20M, capex $8M–$9M, tax rate 30%–32%.

• Arcadia and DynaEnergetics markets expected to remain soft in Q3; NobelClad sales to be comparable to Q2.

• NobelClad backlog increased to $63.9M, with most orders expected to ship within 12 months.