Slide 1: DMC Global's Second Quarter 2024 Earnings Presentation
DMC Global’s Second Quarter 2024 Earnings Presentation August 1, 2024 © 2024 DMC. All rights reserved. ARCADIA CUSTOM’S THERMAL STEEL WINDOWS FEATURED IN PARTNERS’ GROUP U.S. HEADQUARTERS; BROOMFIELD, COLORADO
Slide 2: Use of Non-GAAP Financial Measures & Safe Harbor Language
USE OF NON-GAAP FINANCIAL MEASURES & SAFE HARBOR LANGUAGE *Use of Non-GAAP Financial Measures Adjusted net income (loss), adjusted EBITDA, adjusted EPS, net debt, and free-cash flow are non-GAAP financial measures used by management to measure operating performance. For reconciliations of the most d
Slide 3: Agenda
AGENDA Opening Remarks and Operational Update • Michael Kuta – President and CEO Financial Results and Guidance • Eric Walter – Chief Financial Officer Questions and Answers Concluding Remarks THERMAL STAINLESS-STEEL WINDOWS FROM ARCADIA CUSTOM FEATURED IN ASPEN, COLORADO MOUNTAIN HOME 3
Slide 4: Second Quarter Summary
SECOND QUARTER SUMMARY • Consolidated sales were $171.2 million, up 3% sequentially and down 9% vs. Q2 ‘23 • Sequential improvement driven by sales rebound at Arcadia • YoY decline reflects softer demand from construction and energy markets • 2023 Q2 was DMC’s strongest-ever sales and adjusted EBITD
Slide 5: DMC Q2 2024 Financial Highlights
DMC Q2 2024 FINANCIAL HIGHLIGHTS Sales Adjusted EBITDA / % of Sales $200 $189 $50 $167 $171 $38 / 20.3% 24.8 $150 26.8 25.2 $40 6.6 84.8 $30 $24 / 14.3% 76.2 $19 / 11.4% $100 78.1 $20 5.0 2.4 31.8 $50 79.2 69.7 $10 19.4 61.9 16.7 $0 $0 Q2 '23 Q1 ' 24 Q2 '24 Q2 '23 Q1 ' 24 Q2 '24 $ In Millions $ In M
Slide 6: Second Quarter 2024 Business-Level Financial Performance
SECOND QUARTER 2024 BUSINESS-LEVEL FINANCIAL PERFORMANCE Arcadia DynaEnergetics NobelClad Sales Sales Sales $100 $85 $76 $27 $25 $100 $79 $78 $30 $25 $80 $62 $70 $80 $60 $20 $60 $40 $40 $20 $10 $20 $0 $0 $0 Q2 '23 Q1 ' 24 Q2 '24 Q2 '23 Q1 ' 24 Q2 '24 Q2 '23 Q1 ' 24 Q2 '24 $ In Millions $ In Millions
Slide 7: Improving Financial Strength
IMPROVING FINANCIAL STRENGTH Liquidity Summary June 30, 2024(1) Debt-to-Adjusted EBITDA Leverage Ratio Cash and Cash Equivalents $15 2.90 2.48 Unused Credit Capacity (2) $213 2.10 Total $228 1.69 1.50 1.30 1.26 1.25 Total Outstanding Debt (3) $84 1.10 1.00 Net Debt $70 Q1 '22 Q2 '22 Q3 '2 2 Q4 ' 22
Slide 8: Guidance for Third Quarter 2024
GUIDANCE FOR THIRD QUARTER 2024 Measure Expected Range DMC Consolidated Sales $158M - $168M Arcadia Sales $64M - $68M DynaEnergetics Sales $70M - $74M NobelClad Sales $24M - $26M Adjusted EBITDA attributable to DMC $15M - $18M Arcadia before NCI allocation $10M - $12M Arcadia after NCI allocation $6
Slide 9: Key Objectives for Balance of 2024
KEY OBJECTIVES FOR BALANCE OF 2024 • Advance DMC’s strategic- alternatives process to unlock shareholder value • Execute on Arcadia’s growth initiatives, including: • Strengthen organizational structure and improve finishing capabilities • Deployment of full product and service offering across all s
Slide 10: DMC Investment Considerations
DMC INVESTMENT CONSIDERATIONS • Executing strategy for unlocking shareholder value • Three valuable businesses with leadership positions in critical industries • Compelling valuation vs. peers in building products and energy products industries • Strong financial position • Experienced, execution-fo
Slide 11: Reconciliations Measurements – Net Debt and Free-Cash Flow
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – NET DEBT AND FREE-CASH FLOW ($000’s) Q2 2024 Long-term debt $81,612 Current portion of long-term debt 2,500 Less: Cash and cash equivalents (14,567) Total net debt $69,545 Net cash provided by operating activities $2,343 Less: Acquisition of prope
Slide 12: Reconciliations Measurements – Consolidated Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – CONSOLIDATED ADJUSTED EBITDA ($000’s) Q2 2024 Q1 2024 Q2 2023 Net income 6,293 2,319 17,526 Interest expense, net 2,316 2,317 2,432 Income tax provision 2,792 1,643 6,600 Depreciation 3,431 3,419 3,434 Amortization of purchased intangible assets 5
Slide 13: Reconciliations Measurements – Arcadia Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – ARCADIA ADJUSTED EBITDA ($000’s) Q2 2024 Q1 2024 Q2 2023 Operating income (loss), as reported 5,719 (588) 9,580 Adjustments Depreciation 888 875 889 Amortization of purchased intangible assets 5,278 5,277 5,652 Stock-based compensation 281 342 323
Slide 14: Reconciliations Measurements – DynaEnergetics Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – DYNAENERGETICS ADJUSTED EBITDA ($000’s) Q2 2024 Q1 2024 Q2 2023 Operating income, as reported 7,052 8,842 17,733 Adjustments Depreciation 1,671 1,682 1,713 Amortization of purchased intangible assets 29 15 15 Adjusted EBITDA 8,752 10,539 19,461 20
Slide 15: Reconciliations Measurements – NobelClad Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – NOBELCLAD ADJUSTED EBITDA ($000’s) Q2 2024 Q1 2024 Q2 2023 Operating income, as reported 4,932 5,100 4,707 Adjustments Depreciation 790 780 700 Adjusted EBITDA 5,722 5,880 5,407 2024 Second Quarter Earnings Presentation 15