DMC Glb (NASDAQ:BOOM) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.

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Summary

DMC Glb reported first-quarter consolidated sales of $135.6 million, reflecting a 15% year-over-year decline, with adjusted EBITDA of $3.9 million.

Arcadia's sales were $56.7 million, down 14% year-over-year, affected by high aluminum prices and competitive pricing pressures.

Dyna Energetics' sales were $59.5 million, down 9% year-over-year, with challenges from Middle East conflicts and tariffs impacting performance.

Noble Clad saw a 31% year-over-year sales decline to $19.3 million, but sequential sales increased due to a large international petrochemical project.

Order backlog increased 12% sequentially, reaching the highest level in over 15 years, signaling potential future growth.

The company provided second-quarter guidance, expecting sales between $148 to $158 million and adjusted EBITDA between $6 to $8 million.

Management highlighted encouraging signs for future demand in energy and construction markets, despite ongoing macroeconomic challenges.

Full Transcript

OPERATOR

Greetings and welcome to the DMC Global First Quarter Earnings Call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jeff High. Please go ahead

Jeff High

Hello and welcome to DMC's first quarter conference call. Presenting today are President and CEO Jim O'Leary and Chief Financial Officer Eric Walter. I'd like to remind everyone that matters discussed during this call may include forward looking statements that are based on our estimates of projections and assumptions as of today's date and are subject to risks and uncertainties that are disclosed in our filings with the SEC. Our business is subject to certain risks that could cause actual results to differ materially from those anticipated in our forward looking statements. DMC assumes no obligation to update forward looking statements that become untrue because of subsequent events. Today's earnings release and a related presentation on our first quarter performance are available on the Investors page of our website located at dmcglobal.com a webcast replay of today's presentation will be available at our website shortly after the conclusion of this call and with that, I'll turn the call over to Jim o'.

Jim O'Leary (President and CEO)

Leary. Jim thanks Jeff, and thanks to everyone for joining us today. The macroeconomic challenges that persisted throughout 2025 carried into the first quarter and continued to pressure our construction, energy and industrial end markets. In late February, the onset of the Middle east conflict intensified these headwinds, disrupting supply chains and international oil production while fueling raw material inflation, particularly for aluminum, which is by far Arcadia's biggest cost. Despite these challenges, we delivered financial results that were within our admittedly moderated expectation range. Also, despite all this macroeconomic turmoil, there are some longer term green shoots we're hearing about that are worth mentioning, which we'll discuss later in the call. First quarter Consolidated sales were $135.6 million, down 15% from the 2025 first quarter and down 6%. Sequentially adjusted EBITDA attributable to DMC was $3.9 million, compared with 14.4 million in last year's first quarter and a negative 1.6 million in the fourth quarter. Arcadia, our building products business, reported first quarter sales of $56.7 million, down 14% versus the year ago quarter and flat sequentially. The year over year decline was principally due to the timing of a large mixed use project in Southern California that benefited last year's first quarter. Demand in this year's first quarter remained soft across both commercial and residential construction markets as sharply higher aluminum prices and persistently high interest rates continue to weigh on project activity and customer demand. Average aluminum costs reach multi year highs during the first quarter, increasing 64% year over year and 16% sequentially. A competitive bidding environment also continues to pressure pricing. First quarter adjusted EBITDA attributable to DMC was $2.3 million, down from 5.6 in the 2025 first quarter and 2.4 million in the prior year quarter. At DynaEnergetics, our energy products business, sales were $59.5 million, down 9% year over year and down 14% sequentially. The declines were driven by lower product sales in North America where well completion activity continued to decline and pricing remained competitive. In addition, the conflict in the Middle east delayed customer shipments into that region. First quarter adjusted EBITDA was $2.7 million compared to 7.4 million in the year ago quarter and a negative 2.7 in the prior quarter. The year over year decline was primarily driven by tariffs implemented in April 2025 and the sequential improvement reflects the absence of discrete AR and inventory charges in the fourth quarter. At Noble Clad, our composite metal business first quarter sales were 19.3 million, a 31% year over year decline driven primarily by the timing of large project shipments that benefited the prior year period as as well as reduced bookings in the first half of 2025 due to uncertainty around US and reciprocal tariff policies. Sequentially, sales increased 9% supported by initial deliveries on a large international petrochemical project project. We expect additional shipments from this project throughout the remainder of the year. NobleClad's adjusted EBITDA was $1.9 million compared with 5.4 million in the year ago quarter and 2.1 million in the previous quarter. Order backlog at the end of the first quarter increased 12% sequentially to 70.3 million, marking the highest level in more than 15 years. Now I'll turn it over to Eric

Eric Walter (Chief Financial Officer)

for more detail on our first quarter results and a look at second quarter guidance. Eric thank you Jim. As previously noted, continued macroeconomic pressures and the conflict in the Middle east slowed activity in our core markets and weighed on our first quarter profitability. Our consolidated adjusted EBITDA margin before allocations of non controlling interest or NCI was 4% down from 11.4% in last year's first quarter, but up from break even in the fourth quarter. Arcadia's first quarter adjusted EBITDA margin before NCI was 6.9%, down from 14.2% in last year's first quarter and 7.1% in the fourth quarter. Competitive pricing pressure, high aluminum input costs and lower absorption of fixed manufacturing overhead placed downward pressure on margin during the quarter. DynaEnergetics's adjusted EBITDA margin was 4.6% versus 11.3% in the first quarter last year and up from a negative 4% in the fourth quarter. The decline versus last year relates principally to the impact of tariffs and pricing pressure, while the sequential increase reflects the discrete AR and inventory charges in the fourth quarter. At NobleClad, adjusted EBITDA margin was 9.8% versus 19.2% a year ago and 11.9% in the fourth quarter. The year over year decline reflects the timing of a large project in China that benefited last year's first quarter, while the sequential decline reflects a less favorable project mix in this year's first quarter. First quarter SGA expense was $24.6 million or 18.1% of sales versus 17.8% of sales in the year ago first quarter and 20.7% of sales in the fourth quarter. The sequential decline principally relates to the discrete AR charges At Dyna in the fourth quarter first quarter adjusted net loss attributable to DMC was $5.7 million, while adjusted loss per share attributable to DMC was $0.28. With respect to liquidity, we ended the first quarter with cash and cash equivalents of approximately $32 million. Total debt was $54 million, up slightly from our 2025 year end due to seasonality. Net debt at quarter end was $22.4 million. And now on to guidance for the second quarter, we expect sales will be in a range of 148 to $158 million, while adjusted EBITDA is expected in a range of 6 to $8 million. We expect the anticipated sequential improvement will be driven by demand growth across all three of of our businesses. At dynaenergetics, we're seeing stronger order activity developing in both our international and North American markets. Arcadia is coming off a seasonally softer first quarter, so we expect to see a modest pickup in activity there. At inovaclad, we're anticipating higher shipment volumes tied to a large international petrochemical project. I should note our guidance assumes a relatively consistent operating environment as we are not factoring in additional supply chain disruptions internationally which could impact dynamic shipments into the Middle east affect raw material Availability and order timing at NovaClad or further increase aluminum input costs at Arcadia. As a reminder, our guidance is heavily impacted by macroeconomic conditions, including evolving tariff policies, particularly in our core energy and construction markets. Our guidance is subject to change either upward or downward as these highly volatile inputs evolve in 2026. Now I'll turn the call back to Jim.

Jim O'Leary (President and CEO)

Thanks. Excuse me. Thanks, Eric. After a prolonged period of challenging macroeconomic conditions, we're hearing early indication from peers and competitors based on their recent public statements that demand in several of our key area Excuse me, our key end markets may be improving in Dyna Energetics Oilfield Service Market Several leading industry players have recently noted that the prospect of higher for longer oil prices are supporting plans for increased drilling and completion activity in North America's onshore oil and gas sector. At the same time, expanding interest in enhanced geothermal systems which leverage technologies developed by the oil and gas industry represent a long term opportunity for the business at nobleclad. Our order backlog is at the highest level in more than 15 years and we're seeing a number of leading positive indicators including increased spending by the Navy on enhanced naval readiness and potential demand tied to industrial infrastructure repair and reconstruction in the Middle East. More broadly and also harder to quantify, the increasing narratives around global energy security and greater spending on both defense and energy infrastructure can only be positives as you look much further out for two of our businesses nearer term, Arcadia is tracking positive trends in the Architectural Billings Index, which is a 12 month leading indicator of commercial construction activity. In March, the index for our primary Western US market rose above 50 for the first time since December 2024, meaning more firms were reporting increased billings than declining billings. While we expect continued near term volatility across many of our markets, these indicators are encouraging and suggest that capital spending may be improving over the next several quarters. In the meantime, we remain focused on the disciplined execution and tight cost controls as we position DMC for the future. I want to thank our employees for their continued dedication and hard work and with that we'll open the call for your questions.

OPERATOR

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys and our first question will come from ken Newman with KeyBank Capital Markets.

Ken Newman (Equity Analyst)

Hey guys, Good evening. Hey, Ken, nice to meet you. Hey there. Nice to hear that. We're expecting sales to improve sequentially across all 3 of the businesses. As I think about this second quarter sales guide, is there any color on helping us think about where the largest sequential increases come? It sounds like maybe there's some push outs in DynaEnergetics. How much of there is there a catch up there? Or maybe a little bit of help on Arcadia as well? Just given that the comp there is pretty easy on a year over year basis.

Jim O'Leary (President and CEO)

Yeah, Ken, I think just looking at each one of the businesses, we do expect that there's going to be improvements quarter over quarter at all three of those. Like we said, the NobleClad business is expecting to have a pretty significant ramp up in the second quarter for this international petrochemical project. So that's where you're going to see a lot of the increase for Q2.

Ken Newman (Equity Analyst)

Understood. Okay. And then, you know, we talked a little bit about some ongoing challenges with commodity prices, particularly within aluminum for Arcadia. But I'm curious if you just talk a little bit about price cost impacts and how you're expecting that to trend through the second quarter and maybe any incremental color on what you're seeing from the tariff side of the business. I know Canada has been a challenge, but any. What are your customers kind of saying there in terms of tariffs?

Jim O'Leary (President and CEO)

So, you know, margins for Acadia and the margin comps are going to continue to be challenged. A lot of the aluminum pricing that's happened, you know, happened post this Iranian conflict and then that's going to carry forward and all of our competitors, particularly on large projects are dealing with the same issue. So pricing, you're gonna get bailed out by pricing. We are seeing a little bit more traction, particularly if we're able to serve. If your customer service and your delivery times are up to where we're getting to again at Arcadia. But I'd expect margins to still be challenged for at least the next quarter or two at Arcadia as the aluminum issue works through. And if it stays high, we'll continue to have challenges through the year. But when the market improves eventually and contractors start breaking ground, projects get larger, projects start getting commissioned, which is where we're probably having most of the margin pressure. We could get some relief, but you need a healthier building market for that. And on tariffs, we did not obviously book anything and we didn't put it in our guidance or expecting it, but we have applied for all the, all the same tariff reliefs and rebates. That we're entitled to. DynaEnergetics in particular is expecting several million, but it's so difficult to forecast. The mechanics and the timing are virtually impossible. But, you know, that could be a bluebird that flies in the window. We just have no idea when understood.

Ken Newman (Equity Analyst)

Maybe if I could just sneak one more in here. It was good to hear about the rumblings about potentially improving oil and gas activity here in the States. You know, as you talk to your customers, do you get a sense of how quickly they can move on potential orders if they feel comfortable with the capex spends? And where would you start to see that that initial improvement as it flows through on. On DynaEnergetics would primarily just on the drilling side or would you get, you know, further or maybe a sooner indication on order improvement?

Jim O'Leary (President and CEO)

Well, we have very short lead times there in every environment. So, you know, it's nothing that's going to impact dramatically the next quarter. And if you look at the guidance from everybody from Halliburton to one of the peers that released today, nobody's thinking the second quarter is going to have real huge improvement. I think most people, and again, it's all the suspects that I just ticked off and everybody who's released before us, they're all talking about. As you go into the back half of the year, if you listen to the administration, all these tankers are turning around and heading to the United States and a great many of them are tracking tanker activity is pretty. Is pretty easy to do and it's pretty granular. But that doesn't start to help. And that won't translate into really any big bump in onshore activity till after this upcoming quarter. We're not expecting any major pickup, but if it happened, we've got the capacity and we've got the ability to turn things very quickly. We operate on very short lead times there.

Ken Newman (Equity Analyst)

Understood. Thanks. You're welcome.

OPERATOR

And as a reminder, that is Star One, if you'd like to ask a question. And we'll go next to Jerry Sweeney with Roth Capital Partners.

Jerry Sweeney

Good morning or good afternoon. I'm sorry, Jim or Jeff, thanks for taking my call. Sticking with Dynaenergetics, obviously, I think in the past you've talked about some new product innovations and even some automation. I just wanted to see where that stood and where that could play into potential pickup in, in the second half of this year.

Jim O'Leary (President and CEO)

Well, it's already baked into the guidance and already baked into kind of how we look at the balance of the year. We're getting the savings from the automation that we've been talking about for the Last at least the last three or four quarters. And it's not really new products, it's more value engineering and product reengineering for cost we expect. And again it's in the guidance, it's in the sequential improvement that we just chatted about. And you know, and it's in future years as well. You know, we've got a pretty meaningful, we've got a pretty meaningful slate of cost outs that carry forward into this year and then into 27 as well. And it's from not less new products than it is re engineered existing products. The only thing that would be new products. But I don't know if it's necessarily a new product, just a new application. New end market would be a geothermal where we do expect some business this year and we're really hoping that that ends up being a big growth market in future years. And you know, for, it's not in our press release, it is talked about in public but you know, the only renewable energy that really survived completely unscathed, in fact came out better from Trump's one big beautiful bill was geothermal. And there's a tremendous amount of excitement and enthusiasm for it. It pairs very well with data centers and it fits perfectly with our product and a lot of the applications that fracking has been doing for, you know, for the last, last decade.

Jerry Sweeney

I'm just going to switch over to geothermal. That was my next question. And I mean listen, it is the only baseload renewable energy, true baseload renewable energy out there. So I think that's part of the demand aspect of it. But just speaking of demand, do you have a visibility to the opportunity, what's going on with enhanced geothermal in terms of potential market size and when the opportunity may start to maybe show up in the numbers

Jim O'Leary (President and CEO)

we'll book sales this year it will be, you know, it won't be meaningful enough where we'll break it out. And you know, Jerry, I really have to direct you to some of the industry, the industry literature, Wood, mackenzie, if you look at there have been, there's a couple of really, really good things in the public marketplace from companies that have gone public recently. So I direct you to them and that's kind of what we're hanging our hat on. But you know, we don't have to put in a lot of capital. We're not making major additions to infrastructure. You know, we're just redirecting some of our engineering resources and our customer service resources to service a market that we're really excited about. But you know, we're not basing anything on enormous numbers going forward. We're just trying to meet the demand that's right in front of us. And by the way, utility grade solar did okay coming out of the bill as well. I have to say that because I'm on the board of a utility grade solar company, but I am rooting more for geothermal these days. I got it.

Jerry Sweeney

That's fair. And I get what you're saying. I'll go back and look at that material. Just sticking with Dinah, obviously you've got very good manufacturing, you've got a great product. It reduces the need for manpower on the drill pad, etc. And if there is a quick push back to maybe some or speed up in drilling and even completions, do you think you're potentially better positioned than some of your competitors to meet that demand just because of your foundation?

Jim O'Leary (President and CEO)

Yeah, but not necessarily for the, you know, we have some really good competitors in North America. You know, there's a lot of capacity. That's why pricing has been so challenging, why I think we're better positioned than many. And you know, one of the things you didn't mention is energy security and all the things that are being talked about after this Iranian conflict, you know. Well, I'm very excited about geothermal. I think if you look at, you know, if you look at some of the public stuff and I direct you towards, you know, Fervo's filed an ipo. Their material is fantastic and we're excited for them. But when you look at all the discussion about energy security, I think there's a general recognition now that it's not going to be renewable or it's not going to be fossil fuels or it has to be everything. I saw there's a guy named Ernie Muniz who was the Department of Energy head under Clinton. I saw him in a presentation not long ago where, and he was under clearly a Democratic, very pro renewable administration. He said, we need everything. And this is before the Iranian conflict. Now, there was an article in the Journal last week where there's at least six. And I thought it was more countries that, you know, historically haven't done fracking. There's a lot of countries that have fracking resources that are looking at whether or not they should be, you know, getting a lot more serious about that. Where I think DynaEnergetics is particularly well positioned is, you know, we have an international operation that could be, you know, could be a little challenge making shipments into the Middle east or some of the other parts. It does business particularly in Asia because of the supply chain issues and some of the challenges being created by that conflict. But long term, if the rest of the world gets serious about energy security and it's everything, meaning not just renewable and not just fossil fuels, that's going to be great for us. That won't be next quarter, might not be this year. But longer term, if people are more focused on energy security, recognize that you have to look at the limitations of every, every possible source, and you have a basket of things. We're not going to be talking about getting rid of fossil fuels by 2030, 2035 or 2050. That's always been ridiculous, and I think people are recognizing that now. Got it.

Jerry Sweeney

One more question. And just speaking about security, the Naval Readiness program under Nobleclad, Any details on that? Or is this one specific program that we can watch or track? Or is this a multitude of just, you know, increased shipbuilding or some other aspect?

Jim O'Leary (President and CEO)

It could be a multiple multitude of increased shipping across the board. What we're talking specifically about and what we've got factored into less of an impact this year, but more going into next year. Just going from one nuclear sub to two is a really big deal. If you look at what the budgets and what Trump and Hegseth and others have talked about under naval readiness, it's a lot more than one or two subs that they're talking about. Increasing the challenges. And again, not being a show for the Wall Street Journal, but if you look at. And it's been in the Atlantic, it's been in all the foreign relations magazines, too. You know, the challenge is if you go to Newport News, you know, Groton, the new shipyard in Philadelphia, Naval readiness is being hampered by just people, you know, you can't build this stuff fast enough. If, you know, and the Nobel. Clyde, People must be starting to hate me because every time I see one of these articles, I forward it to them and ask why it can't be more. And the answer is always the same. It's a question of the constraints, and the constraints are all manpower. And, you know, that will fix itself. But again, it won't fix itself by next quarter or the end of this year. I do think even if peace breaks out around the world, you know, the issues around naval readiness, particularly with, you know, concerns in Asia, you know, a heightened awareness of what's happened at the Straits of Hormuz, this is never going away and in the long term be a good thing for us.

Jerry Sweeney

Got it. No, there's huge, huge spending. Pacific Defense Initiative is one that's out there, but it's super helpful. I appreciate the longer look and view on that perspective. So thanks guys.

Jim O'Leary (President and CEO)

No, you're welcome. Thank you.

OPERATOR

This now concludes our question and answer session. I would like to turn the floor back over to Jim o' Leary for closing comments.

Jim O'Leary (President and CEO)

Terry, other than thanks for your patience. We know it's been a difficult year. You know, there's an old saying and I don't know if it's one of the immutable laws of nature, but you know, things can't go up until they stop going down. And it does feel like this quarter and I'm not, you know, I'm hoping we make next quarter. I'm hoping things continue to look a little bit cheerier. But you know, once things start going down, you got enhanced prospects for them going up. We're not reveling in all the insecurity around the world. But for a company that's tied to energy infrastructure, you know, older technologies around fossil fuel, the naval readiness, we talked about, you know, a world that's what we're living in, those are all positives for us. So, you know, just the fact that things are a little bit cheerier longer term out is something we haven't been able to talk about before. And you know, not specifically a next quarter or the quarter after thing, but you know, Arcadia and I do a lot of other things in the building industry. This is still a pretty gloomy year. The affordability and the interest rate issues, nothing's changed. But they do feel like they've stopped getting worse. And again, you know, things ain't going up until they stop going down. And they do feel like they've, you know, at least stabilized. And if you remember this time last year, we'd been through our third or fourth president at Arcadia, we destabilized it badly with integration and you know, we were struggling with some supply chain challenges and some self inflicted issues where, you know, they've definitely stabilized. Jim Schladen and a couple of new team members we brought there are doing a great job. You know, things have at least stabilized and I think it's in the press release. But you know, the fact that the Architectural Billings Index prepped above 50 for the first time or hit 50 for the first time in over a year, you know, it's a real positive when you look further out and you know, we're seeing that, you know, that doesn't help with the affordability issues that the contractors are dealing with, doesn't help with interest rates. You know, it would have been nice if, you know, the Fed gave a little bit more promise for interest rates going down, but until the inflationary picture is a little bit better, we won't expect that. But even at Arcadia, which isn't necessarily going to benefit from energy security, naval readiness, some of the bigger themes we talked about, but Arcadia, things have stopped going down. The team there has done a great job of stabilizing things. We've attracted back some of the team members that had left the company and, you know, were really, you know, top notch salespeople. So again, it's not going to be next quarter, may not be this year, but one of our peers talked about 2027 being, you know, being a year when they expect things to really start kicking in. And I hope that's true for us, too. But when things stop going down, the prospects of them going up are a lot better. And hopefully that's the case for us. So thanks to our investors, thanks to the employees who are slogging through this every day, and we'll talk to you next quarter.

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