DMC Global Reports First Quarter Financial Results
- First quarter sales of $67.3 million increased 24% sequentially and 73% from Q1 2017
- DynaEnergetics and NobelClad report sequential sales increases of 32% and 5%, respectively
- Consolidated gross margin improves to 34% from 33% in Q4 2017 and 27% in Q1 2017
- Net income of $3.9 million, or $0.26 per diluted share, includes $3.1 million in accrued anti-dumping penalties
- First quarter adjusted operating income* was $8.6 million; adjusted net income* was $7.2 million; adjusted net income per diluted share* was $0.49; and adjusted EBITDA* was $11.6 million
BOULDER, Colo. - April 26, 2018 - DMC Global Inc. (Nasdaq: BOOM) today reported financial results for its first quarter ended March 31, 2018.
Sales were $67.3 million, a 24% sequential increase and a 73% improvement versus the first quarter of 2017. The increase was due to strong demand and improved pricing at DynaEnergetics, DMC’s oilfield products business, and better-than-expected sales at NobelClad, the Company’s explosion welding business. First quarter gross margin was 34% versus 33% in the fourth quarter and 27% in the year-ago first quarter.
Operating income was $5.3 million versus an operating loss of $2.3 million in last year’s first quarter. Net income was $3.9 million, or $0.26 per diluted share, versus a net loss of $3.0 million, or $0.21 per diluted share, in the year-ago first quarter.
Excluding $3.1 million in accrued anti-dumping penalties and $144,000 in restructuring expenses, first quarter adjusted operating income was $8.6 million and adjusted net income was $7.2 million, or $0.49 per diluted share. First quarter adjusted EBITDA was $11.6 million versus $7.7 million in the fourth quarter and $930,000 in last year’s first quarter.
Net debt* (lines of credit less cash and cash equivalents) at March 31, 2018, was $18.6 million versus $9.0 million at December 31, 2017. The increase primarily was attributable to borrowings to fund working capital and for the construction of DynaEnergetics' new 74,000-square-foot manufacturing, assembly and administrative facility at its manufacturing site in Blum, Texas.
First quarter sales at DynaEnergetics were a record $49.1 million, up 32% sequentially and 123% versus last year’s first quarter. Gross margin was 40%, up from 33% in last year's first quarter. Operating income was $8.7 million versus $40,000 in the comparable year-ago quarter. Excluding accrued anti-dumping penalties, adjusted operating income was $11.8 million dollars. Adjusted EBITDA was $13.4 million versus $1.7 million in the 2017 first quarter.
NobelClad reported third-quarter sales of $18.2 million, up 5% sequentially and 7% versus the 2017 first quarter. Gross margin was 18% versus 19% in last year's first quarter. Operating loss was $12,000 versus operating income of $395,000 in the year-ago quarter. Excluding restructuring charges related to NobelClad’s European consolidation program, adjusted operating income was $132,000. Adjusted EBITDA was $948,000 versus $1.4 million in last year's first quarter.
NobelClad’s trailing 12-month book-to-bill ratio at the end of the first quarter was 1.04. Order backlog was $35.6 versus $37.5 million at the end of the 2017 fourth quarter.
Kevin Longe, president and CEO, said, “Stronger-than-expected sales of DynaEnergetics’ intrinsically safe DynaSelect™ detonators and the Factory-assembled, Performance-assured™ DynaStage™ system, combined with improved pricing, resulted in first quarter consolidated financial results that exceeded our forecasts. North America’s unconventional onshore oil and gas industry remains very active, and a growing number of operators and service companies are turning to these systems to enhance well-completion efficiencies, improve reliability and drive down operating costs.
“The capacity expansion initiatives underway at DynaEnergetics’ facilities in Texas, Pennsylvania and Germany are all progressing on schedule. In addition, the business has successfully addressed various bottlenecks in its supply chain, which should accelerate the ramp up in DynaStage production.”
“I am very encouraged by our start to fiscal 2018, and by our prospects for continued operational and financial growth. I would like to thank our employees around the world for their continued commitment to the Company’s growth and success.”