Summary of DMC's Q3 2025 Earnings Call

1Key Financial Results and Metrics

Consolidated Sales: $151.5 million, down 1% year-over-year.

Adjusted EBITDA: $8.6 million, up 51% year-over-year. Including noncontrolling interest, adjusted EBITDA was $12 million (7.9% of sales).

Net Debt: Reduced to $30.1 million, down 47% since the start of the year.

Adjusted Net Loss: $1.6 million, or $0.08 per share.

Cash and Cash Equivalents: Approximately $26.4 million.

Sales by Segment:

Arcadia (Building Products): $61.7 million, up 7% year-over-year.

DynaEnergetics (Energy Products): $68.9 million, down 1% year-over-year.

NobelClad (Composite Metals): $20.9 million, down 16% year-over-year.

2Strategic Updates and Business Highlights

Focus on deleveraging the balance sheet, achieving the lowest net debt level since acquiring Arcadia.

Arcadia: has stabilized operations, showing improved profitability and operational execution despite challenging market conditions.

DynaEnergetics: is managing costs and exploring international opportunities amid a declining U.S. onshore market.

NobelClad: secured a record $20 million order for a major international petrochemical project, with a backlog of $57 million, up 53% from the previous quarter.

3Forward Guidance and Outlook

Q4 Sales Guidance: Expected in the range of $140 million to $150 million.

Adjusted EBITDA Guidance: Anticipated between $5 million and $8 million.

Guidance reflects challenges in converting recent bookings into sales and continued headwinds in DynaEnergetics' core market.

4Bad News, Challenges, or Points of Concern

Market Conditions: Persistent high interest rates and soft commercial construction activity are affecting all segments.

DynaEnergetics: Experienced an 8% decline in well completions and nearly 20% drop in active frac crews since March 2025.

NobelClad: Sales impacted by delayed bookings and tariff-related uncertainties, leading to lower absorption of fixed manufacturing overhead.

Overall Economic Uncertainty: Concerns about future demand trends and the potential for further economic instability.

5Notable Q&A Insights

Arcadia's Market Position: While there are some internal improvements, broader industry conditions remain challenging. Stability and operational improvements are key focuses.

Tariff Impacts: DynaEnergetics faced approximately $3 million in tariff-related costs, with pricing power limited in the current market.

Visibility for 2026: Management remains cautious about future projections due to poor visibility in the market.

NobelClad's Order Timing: The large order is expected to ship primarily in the second half of 2026, indicating a longer wait for revenue recognition. Overall, DMC is navigating a challenging market landscape while making strides in financial health and operational stability, with cautious optimism for future recovery.