Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 Earnings Presentation May 4, 2023 © 2023 DMC. All rights reserved. ARCADIA FRAMING SYSTEMS FEATURED IN ASANTE LIBRARY, SURPRISE ARIZONA
Slide 2: Use of Non-GAAP Financial Measures & Safe Harbor Language
USE OF NON-GAAP FINANCIAL MEASURES & SAFE HARBOR LANGUAGE (UPDATE) *Use of Non-GAAP Financial Measures Adjusted net income, adjusted EBITDA and net debt are non-GAAP financial measures used by management to measure operating performance. For reconciliations of the most directly comparable GAAP measu
Slide 3: Agenda
AGENDA Opening Remarks and Operational Update • David Aldous – Director and Interim Co-CEO • Michael Kuta – Interim Co-CEO Financial Results and Guidance • Eric Walter, Chief Financial Officer Questions and Answers Concluding Remarks DYNAENERGETICS MANUFACTURING FACILITY (FEATURING ARCHITECTURAL FRA
Slide 4: 2023 First Quarter Highlights
2023 FIRST QUARTER HIGHLIGHTS • Record consolidated sales and improved profitability • Results driven by strong sales growth and expanded margins at Arcadia and DynaEnergetics • Healthy customer demand reported at all businesses • NobelClad order backlog improves to 10-year high $60 million • DynaEn
Slide 5: DMC Q1 2023 Financial Highlights
DMC Q1 2023 FINANCIAL HIGHLIGHTS Sales Adjusted EBITDA / % of Sales $200 $184.3 $30 $175.1 22.0 $24.3 / 13% $160 23.1 $25 $22.4 / 13% $138.7 4.2 $20 2.8 21.9 $120 82.0 $15.1 / 11% 77.6 $15 48.9 $80 4.6 $10 19.6 20.1 $40 74.4 80.3 68.0 $5 10.5 $0 $0 $ In Millions Q1 22 Q4 22 Q1 23 $ In Millions Q1 22
Slide 6: First Quarter 2023 Business-Level Financial Performance
FIRST QUARTER 2023 BUSINESS-LEVEL FINANCIAL PERFORMANCE Arcadia DynaEnergetics NobelClad Sales Sales Sales $100 $80.3 $100 $25 $23.1 $22.0 $82.0 $21.9 $74.4 $77.6 $80 $68.0 $80 $20 $60 $60 $48.9 $15 $40 $40 $10 $20 $20 $5 $0 $0 $0 $ In Millions Q1 22 Q4 22 Q1 23 $ In Millions Q1 22 Q4 22 Q1 23 $ In
Slide 7: Improving Financial Strength
IMPROVING FINANCIAL STRENGTH Debt-to-Adjusted EBITDA Liquidity Summary March 31, 2023 Leverage Ratio 3.0 Cash and Cash Equivalents $19.6M 2.9 2.5 Unused Credit Capacity $50.0M 2.1 Total Available Liquidity $69.6M 1.7 1.5 Total Outstanding Debt $126.7M Net Debt $107.0M 0.0 Q4 '21 Q1 '22 Q2 '22 Q3 '22
Slide 8: Guidance for Second Quarter 2023
GUIDANCE FOR SECOND QUARTER 2023 Measure Expected Range DMC Consolidated Sales $177M – $187M Arcadia Sales $75M – $79M DynaEnergetics Sales $78M – $82M NobelClad Sales $24M – $26M Consolidated Gross Margin 29% – 30% Consolidated SG&A $29M – $31M Depreciation & Amortization ~$9.2 Interest Expense $2.
Slide 9: Key Objectives for Balance of 2023
KEY OBJECTIVES FOR BALANCE OF 2023 • Fully implement ERP and expand painting capacity at Arcadia • Maintain margin expansion initiatives at DynaEnergetics and Arcadia • Maintain operational excellence to effectively address NobelClad’s growing order backlog • Improve DMC’s cash flow through cost and
Slide 10: DMC Investment Considerations
DMC INVESTMENT CONSIDERATIONS • Businesses have built leadership positions in healthy end markets that are poised for growth • Compelling valuation vs. peers in energy products and building products industries • Clear paths toward long-term sales growth and improved cashflow generation at all busine
Slide 11: Questions & Answers
Questions & Answers © 2023 DMC. All rights reserved. DMC’S MANUFACTURING CAMPUS – LIEBENSCHEID, GERMANY
Slide 12: Reconciliations Measurements - Net Debt
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS - NET DEBT (Amount in Thousands) Q1 2023 Long-term debt $111.6 Current portion of long-term debt 15.0 Less: Cash and cash equivalents (19.6) Total net debt $107.0 2023 First Quarter Earnings Presentation 12
Slide 13: Reconciliations Measurements – Consolidated Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – CONSOLIDATED ADJUSTED EBITDA ($MM) Q1 2023 Q4 2022 Q1 2022 Net income (loss) 2.1 3.4 (4.3) Interest expense, net 2.4 2.1 1.0 Income tax provision (benefit) 2.5 4.4 (0.9) Depreciation 3.4 3.7 3.4 Amortization of purchased intangible 5.7 3.8 13.0 as
Slide 14: Reconciliations Measurements – Arcadia Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – ARCADIA ADJUSTED EBITDA ($MM) Q1 2023 Q4 2022 Q1 2022 Operating income (loss), as reported 3.1 0.4 (2.4) Adjustments Depreciation 0.8 0.8 0.5 Amortization of purchased intangible 5.7 3.6 12.8 assets Stock-based compensation 0.6 1.2 0.2 CEO transit
Slide 15: Reconciliations Measurements – DynaEnergetics Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – DYNAENERGETICS ADJUSTED EBITDA ($MM) Q1 2023 Q4 2022 Q1 2022 Operating income, as reported 13.2 12.5 3.3 Adjustments Depreciation 1.8 1.9 1.9 Amortization of purchased intangible 0.0 0.0 0.1 assets Adjusted EBITDA 15.0 14.4 5.3 2023 First Quarter
Slide 16: Reconciliations Measurements – NobelClad Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – NOBELCLAD ADJUSTED EBITDA ($MM) Q1 2023 Q4 2022 Q1 2022 Operating income, as reported 2.6 2.3 0.7 Adjustments Depreciation 0.8 0.9 0.8 Restructuring expenses - 0.1 0.0 Amortization of purchased intangible - 0.1 0.1 assets Adjusted EBITDA 3.4 3.4 1