- Fourth quarter sales were $152.4 million, flat sequentially and down 12% versus Q4 2023
- Net income attributable to DMC was $0.3 million, while total net loss was $1.2 million
- Adjusted net income attributable to DMC* was $1.8 million, or $0.09, per diluted share
- Adjusted EBITDA attributable to DMC* was $10.4 million, while total adjusted EBITDA, inclusive of non-controlling interest (NCI), was $11.9 million
Sales at Arcadia, DMC's architectural building products business, were up 4% sequentially and down 11% versus last year's fourth quarter. Sales of commercial exterior products, which generate approximately 75% of Arcadia's total revenue, were up modestly versus both the 2024 third quarter and comparable prior-year period. The year-over-year decline in fourth quarter sales principally reflects weak demand from the luxury home market for Arcadia's premium residential windows and doors.
Jim Schladen, who recently rejoined Arcadia as president, is focused on a "back-to-basics” approach to driving sales and earnings growth, further strengthening the core commercial operations, and implementing an improvement plan for Arcadia's high-end residential window and door offering. This plan may include the rightsizing of certain underperforming offerings.
At DynaEnergetics, DMC's energy products business, fourth quarter sales declined 9% sequentially and 15% year-over-year. The sequential decline reflects a seasonal slowdown in North American onshore well completions, which was partially offset by strong international demand. The year-over-year sales decline principally reflects lower pricing in North America.
During the fourth quarter, DynaEnergetics introduced the next generation of its DynaStage perforating system, the leading modular perforating gun in the unconventional oil and gas industry. The new model brings a further improvement in down-hole reliability. Having been fully value reengineered to reduce material and complexity, it is lighter and more compact than its predecessor. All customers have completed the transition to the new system, which is being embraced for its unique and superior value proposition. DynaEnergetics also completed the first phase of a major automation project at its North American manufacturing center in Blum, Texas. Phase two is on track for completion in the second quarter.
At NobelClad, DMC's composite metals business, strong shipments led to the second-best quarterly sales performance in more than a decade. Fourth quarter sales increased 14% sequentially, but declined 8% versus last year's fourth quarter, which was NobelClad's strongest sales quarter since 2013. Order backlog at the end of the fourth quarter was $49 million versus $59 million at the end of the third quarter, reflecting robust fourth quarter shipments that were not sufficiently offset by new bookings. Inquiries and order opportunities within NobelClad's primary U.S. downstream energy market had improved throughout the fourth quarter and have remained healthy in the first quarter. NobelClad is focused on converting as many of these opportunities as possible into firm orders.
The Company believes Arcadia and DynaEnergetics have made significant progress stabilizing and improving their operations, positioning them to fully participate in future recoveries of their respective end markets. DMC's focus prospectively is on margin expansion, EBITDA growth and debt reduction. During December 2024, DMC reached an agreement with its Arcadia joint venture partners to extend its put obligation until no earlier than September 2026. This extension will provide the company with significant optionality to deleverage its balance sheet with free cash flow while exploring opportunities to refinance on more favorable terms.
Guidance
First quarter sales are expected to be in a range of $146 million to $154 million, while adjusted EBITDA is expected in a range of $8 million to $11 million. DMC said its businesses are closely monitoring evolving U.S. and reciprocal tariff policies.
Summary Fourth Quarter Results
Three months ended | Change | ||||||||||||||||
(Amounts in 000's, except Per Share Data) | Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | Sequential | Year-on-year | ||||||||||||
Net sales | $ | 152,374 | $ | 152,429 | $ | 174,036 | - | % | (12 | )% | |||||||
Gross profit percentage | 20.8 | % | 19.8 | % | 26.1 | % | |||||||||||
SG&A | $ | 25,126 | $ | 28,205 | $ | 27,179 | (11 | )% | (8 | )% | |||||||
Net (loss) income | $ | (1,156 | ) | $ | (159,416 | ) | $ | 3,569 | 99 | % | (132 | )% | |||||
Net income (loss) attributable to DMC | $ | 296 | $ | (101,323 | ) | $ | 2,764 | 100 | % | (89 | )% | ||||||
Diluted net (loss) income per share attributable to DMC | $ | (0.17 | ) | $ | (8.27 | ) | $ | 0.01 | 98 | % | (1,800 | )% | |||||
Adjusted net income (loss) attributable to DMC | $ | 1,754 | $ | (9,615 | ) | $ | 5,179 | 118 | % | (66 | )% | ||||||
Adjusted diluted net income (loss) per share | $ | 0.09 | $ | (0.49 | ) | $ | 0.26 | 118 | % | (65 | )% | ||||||
Adjusted EBITDA attributable to DMC | $ | 10,382 | $ | 5,671 | $ | 19,589 | 83 | % | (47 | )% | |||||||
Adjusted EBITDA before NCI allocation | $ | 11,876 | $ | 7,015 | $ | 23,278 | 69 | % | (49 | )% | |||||||
Adjusted EBITDA before NCI allocation margin | 7.8 | % | 4.6 | % | 13.4 | % |
Arcadia
Three months ended | Change | ||||||||||||||||
Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | Sequential | Year-on-year | |||||||||||||
Net sales | $ | 60,272 | $ | 57,818 | $ | 67,958 | 4 | % | (11 | )% | |||||||
Gross profit percentage | 22.4 | % | 23.5 | % | 27.8 | % | |||||||||||
Adjusted EBITDA attributable to DMC | $ | 2,243 | $ | 2,014 | $ | 5,533 | 11 | % | (59 | )% | |||||||
Adjusted EBITDA before NCI allocation | 3,737 | 3,358 | 9,222 | 11 | % | (59 | )% | ||||||||||
Adjusted EBITDA before NCI allocation margin | 6.2 | % | 5.8 | % | 13.6 | % |
- Sales decline vs. Q4 2023 reflects weak demand from luxury residential market.
- Adjusted EBITDA decline vs. prior-year quarter was disproportionate to sales decline due to higher fixed costs associated with the manufacturing of luxury residential products.
Three months ended | Change | ||||||||||||||||
Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | Sequential | Year-on-year | |||||||||||||
Net sales | $ | 63,675 | $ | 69,679 | $ | 75,306 | (9 | )% | (15 | )% | |||||||
Gross profit percentage | 15.1 | % | 12.0 | % | 21.4 | % | |||||||||||
Adjusted EBITDA | $ | 5,098 | $ | 414 | $ | 9,286 | 1,131 | % | (45 | )% | |||||||
Adjusted EBITDA margin | 8.0 | % | 0.6 | % | 12.3 | % |
- Year-over-year sales decline was attributable to lower pricing in North America, while sequential sales decline reflects slowdown in North American well-completion activity.
- Year-over-year margin decline reflects lower pricing, while sequential margin improvement was due to third-quarter inventory and bad-debt charges.
Three months ended | Change | ||||||||||||||||
Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | Sequential | Year-on-year | |||||||||||||
Net sales | $ | 28,427 | $ | 24,932 | $ | 30,772 | 14 | % | (8 | )% | |||||||
Gross profit percentage | 30.5 | % | 33.2 | % | 33.8 | % | |||||||||||
Adjusted EBITDA | $ | 5,848 | $ | 5,776 | $ | 7,608 | 1 | % | (23 | )% | |||||||
Adjusted EBITDA margin | 20.6 | % | 23.2 | % | 24.7 | % |
- Rolling 12-month bookings were $96.6 million, and the 12-month book-to-bill ratio was 0.92.
Twelve months ended | Change | |||||||||
Dec 31, 2024 | Dec 31, 2023 | Year-on-year | ||||||||
Net sales | $ | 642,851 | $ | 719,188 | (11 | )% | ||||
Gross profit percentage | 23.4 | % | 29.5 | % |
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