Dmc Global Inc. · NASDAQ:BOOM
Dmc Global — Investor Presentation (March 2022)
50 slides from Dmc Global's investor presentation, March 2022
Slide 1: Investor Presentation March 2022
Investor Presentation March 2022 © 2022 DMC. All rights reserved.
Slide 2: Cautionary Statement Regarding Forward-Looking Information
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This presentation contains “forward-looking Although we believe that our expectations as and foreign, impacting our business and the statements” within the meaning of section 27A of expressed in these forward-looking statements are business
Slide 3: About DMC
ABOUT DMC • DMC Global has built a portfolio of innovative, asset-light companies that provide differentiated products and services to niche segments of the energy, industrial and building products markets • We empower our companies to lead the markets they serve and believe in localized decision ma
Slide 4: Select Data
SELECT DATA* Symbol (Nasdaq GS): BOOM 52-week price range: $26.07 – $70.00 Average daily volume: 130,000 Market capitalization: $575 Million Shares outstanding: 18.7 Million Approximate float: 18.5 Million Fiscal year: December 31 Revenue (ttm): $260.1 Million Pro forma revenue1 (ttm): $500.5 Millio
Slide 5: DMC Performance
DMC PERFORMANCE Sales Adjusted EBITDA** $600 $100 $90 93.8 $500 $80 500.5 $70 $400 397.5 $60 59.6 $300 326.4 $50 50.1 $40 260.1 229.2 $200 $30 192.8 31.5 166.9 158.6 $20 23.1 $100 20.2 19.1 $10 13.1 9.0 $0 $0 2015 2016 2017 2018 2019 2020 2021 2021 1 2015 2016 2017 2018 2019 2020 2021 2021 1, 2 $ in
Slide 6: Management
MANAGEMENT KEVIN LONGE MICHAEL KUTA MICHELLE SHEPSTON President & CEO CFO EVP & CLO Named President, CEO and Director in 2013 Joined DMC as CFO in 2014 Joined DMC in 2016 Extensive experience repositioning, building, Expertise in integrating mergers and Expertise in mergers & acquisitions, equity op
Slide 7: Management
MANAGEMENT JOHN SCHEATZLE JEFF FITHIAN GEOFF HIGH Senior VP, Manufacturing Operations CIO VP, IR & Corp. Comm. & Sustainability Joined DMC in 2014 Joined DMC in 2014 Joined DMC in 2022 Expertise in IT strategy, digital transformation, Expertise in institutional, analyst and retail Expertise in manag
Slide 8: Non-Executive Directors
NON-EXECUTIVE DIRECTORS DAVID ALDOUS ANDREA BERTONE ROBERT COHEN RUTH DREESSEN Chairman of DMC Global. Former President of Duke Former President & CEO of Former Managing Director of More than 20 years in Energy International LLC. Korea First Bank. Former J.P. Morgan’s Chemicals executive leadership
Slide 9: Our Culture and Employee Value Proposition
OUR CULTURE EMPLOYEE VALUE PROPOSITION DMC promotes a culture that We are committed to supports local innovation and providing a highly supportive environment where people growth. We empower people and are challenged to excel and organizations by institutionalizing empowered to transform entrepreneu
Slide 10: DMC Family of Businesses
DMC FAMILY OF BUSINESSES Architectural building products Well completion and well Composite metal solutions for for the commercial decommissioning solutions for global industrial infrastructure construction and high-end global energy industry and transportation industries residential markets DMCGlob
Slide 11: DMC and Arcadia: Pro Forma Financial Performance and End Market Exposure
DMC AND ARCADIA: PRO FORMA FINANCIAL PERFORMANCE AND END MARKET EXPOSURE DMC acquired a 60% controlling interest in Arcadia on December 23, 2021. 2021 Pro Forma, inclusive of Arcadia ($ in millions) Sales Gross Margin Adjusted EBITDA (60% Arcadia) $600 40% $50 50 $500 $40 30% 34% $400 500 $30 28% $3
Slide 12: Market Size Overview
MARKET SIZE OVERVIEW $ millions 4,500 Commercial 4,000 Interiors $1B 3,500 3,000 High-End Residential $1.5 Billion 2,500 2,000 1,500 Commercial Exteriors 1,000 $2 Billion $1.5 Billion 500 $500 million 0 Nob elClad DynaEn ergetics Arcadia Estimated market share: 20% Estimated market share: 20% Estima
Slide 13: Diversified Revenue Streams
DIVERSIFIED REVENUE STREAMS DMC has leading positions in diverse markets with distinct cycles Covid Pandemic 700,000 600,000 500,000 Subprime Financial Crisis Oil Price Collapse 400,000 300,000 200,000 100,000 - ($000) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 14: Arcadia
Presentation Title 3/21/22 DMCGlobal.com 14
Slide 15: Arcadia Overview
ARCADIA OVERVIEW Arcadia is a leading supplier of architectural building products, which include exterior and interior framing systems, windows, curtain walls and interior partitions for the commercial buildings market; and highly engineered windows and doors for the high-end residential market • Hi
Slide 16: One Company Serving Three Distinct Markets
ONE COMPANY SERVING THREE DISTINCT MARKETS Arcadia Wilson Partitions Arcadia Custom (Commercial Exteriors) (Commercial Interiors) (High-end Residential) • Architectural framing systems • Door framing systems • Thermally broken steel and • Curtain and window walls • Aluminum doors aluminum windows an
Slide 17: Arcadia Serves Growing Low and Mid-Rise Commercial Exterior Market
ARCADIA SERVES GROWING LOW AND MID-RISE COMMERCIAL EXTERIOR MARKET • Commercial exteriors business has captured 10% share in addressable western and southwestern U.S. markets • Serves highly diversified customer base with 2,000+ unique buyers • Strong recurring order rates: average customer places ~
Slide 18: Wilson Partitions Business Model Built to Succeed in Up and Down Cycles
WILSON PARTITIONS BUSINESS MODEL BUILT TO SUCCEED IN UP AND DOWN ECONOMIC CYCLES • Provides custom interior framing systems for broad range of commercial end markets • Sells through national sales force • Supported by manufacturing facilities in California, Connecticut and Texas • Countercyclical de
Slide 19: Arcadia Custom Addressing Growing High-End Residential Real Estate Market
ARCADIA CUSTOM ADDRESSING GROWING HIGH-END RESIDENTIAL REAL ESTATE MARKET • Provides custom, fully fabricated steel, aluminum and wood windows and doors to luxury home market • Supported by national network of sales agents, and approximately 140 high-end window and door dealers • Serves large and gr
Slide 20: Arcadia's National Presence
ARCADIA’S NATIONAL PRESENCE Arcadia facilities Manufacturing Finishing Regional Service Centers Manufactures architectural framing solutions In-house painting and anodizing Local service centers with onsite fabrication • Efficient manufacturing base allows for cost- • Offers custom paint and anodize
Slide 21: DynaEnergetics
DMCGlobal.com DynaEnergetics Manufacturing Campus – Blum, Texas
Slide 22: DynaEnergetics Overview
DYNAENERGETICS OVERVIEW • DynaEnergetics is a leading provider of well-completion and well decommissioning solutions to the global oil and gas industry, and also manufacturers specialized initiating systems for the mining industry • Primary offering is perforating systems for the unconventional oil
Slide 23: DynaEnergetics' Performance
DYNAENERGETIC’S PERFORMANCE Sales Adjusted EBITDA* $350 $100 $90 94.5 $300 310.4 $80 1 $250 $70 237.4 $60 $200 58.8 $50 175.4 $150 $40 146.4 121.3 $100 $30 1 $20 22.8 76.9 67.3 $50 16.4 16.3 $10 2.5 8.1 8.3 $0 $0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 $ in millions *No
Slide 24: DynaEnergetics' Products Essential in Well Completion Process
DYNAENERGETICS’ PRODUCTS ESSENTIAL IN WELL COMPLETION PROCESS Step 1: Drilling Step 2: Completion Step 3: Production • During the drilling process, metal pipe is inserted into the wellbore and encased in cement • Before hydrocarbons can flow into the well and up to the surface, the well must be comp
Slide 25: A Better Business Model
A BETTER BUSINESS MODEL • DynaEnergetics is a single-source provider of completion solutions, simplifying the supply chain and logistics • Operators can achieve cost savings of up to $250,000 per well Service Compa ny Hea d q u arters DynaEnergetics single-source model Traditional multi-vendor model
Slide 26: DS Factory-Assembled Perforating System vs. Traditional Gun
DS FACTORY-ASSEMBLED, PERFORMANCE-ASSURED PERFORATING SYSTEM VS. TRADITIONAL PERFORATING GUN & COMPONENTS DynaEnergetics DS Perforating System Traditional Perforating Gun & Components Resistorized detonator IS2™ Top-Fire Wireless Detonator Addressable switch DMCGlobal.com
Slide 27: DS Systems Provide Business Model Advantage
DS SYSTEMS PROVIDE BUSINESS MODEL ADVANTAGE DS System Advantages: Benefits: • Factory-assembled and tested systems are delivered directly • No misfires – 99.96% reliability rate to the wellsite or staging facility • Reduced transportation, storage and labor costs • System is armed in seconds with in
Slide 28: Well Decommissioning Tools
WELL DECOMMISSIONING TOOLS • DynaEnergetics provides a broad suite of products used to permanently seal end- of-life wells. • These include the innovative DynaSlot DynaSlot perforating system Puncher systems system, which incorporates unique slotted charges configured in a helical, overlapping patte
Slide 29: Capacity in Place
CAPACITY IN PLACE Four manufacturing, R&D, and customer training centers – two in Texas, two in Germany Six automated IS2 assembly lines in Troisdorf, Germany Four shaped charge manufacturing lines in Texas and Germany Fifty CNC machines for TSA and gun manufacturing in Texas and Germany Six DS asse
Slide 30: NobelClad
DMCGlobal.com 30 NobelClad Manufacturing Campus – Liebenscheid, Germany
Slide 31: NobelClad Overview
NOBELCLAD OVERVIEW NobelClad is a leading global supplier of specialized industrial building products Serves a diverse range of end markets with custom, composite-metal solutions for use in industrial processing, construction and infrastructure projects Competitive advantages include industry-leadin
Slide 32: NobelClad's Performance
NOBELCLAD’S PERFORMANCE Sales Adjusted EBITDA* $120 $25 $100 91.3 $20 90.0 89.0 87.1 $80 84.8 82.8 $15 15.5 71.6 $60 13.7 12.9 11.1 $10 10.7 10.8 10.7 $40 7.7 $5 $20 21.1 3.4 $0 $0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 $ in millions *Non-GAAP financial measure 2021 In
Slide 33: Investments in Application Development
INVESTMENTS IN APPLICATION DEVELOPMENT Investments in product and application development creating growth opportunities in new and existing markets: • Gold processing • Transportation • Petrochemical • Clad pipe • Engineered wood • Concentrating solar power Structural transition joints from NobelCla
Slide 34: Demand Drivers for Composite Metals
DEMAND DRIVERS FOR COMPOSITE METALS Global Infrastructure Corrosive Design Investment Environments Flexibility DMCGlobal.com 34
Slide 35: NobelClad Products and Associated Applications
NOBELCLAD PRODUCTS AND ASSOCIATED APPLICATIONS Clad Product Clad Plate Clad Head Tube Sheet Structural Transition Joint Application Separation Towers Pressure Vessels Heat Exchangers Deck/hull Interface DMCGlobal.com 35
Slide 36: NobelClad's Competitive Advantage
NOBELCLAD’S COMPETITIVE ADVANTAGE NobelClad’s leadership position in the explosion welding industry is protected by significant barriers to entry: • Global network of specialty metals providers • Permits and shooting sites in U.S. and Europe • Mastery of explosion-welding process for large-scale pro
Slide 37: Primary End Markets Served
PRIMARY END MARKETS SERVED • Chemical • Oil and Gas • Metals and Mining • Marine • Power Generation • Alternative Energy • Industrial Refrigeration • Transportation • Defense and Protection Titanium clad pressure vessels – image courtesy of Coek Engineering. DMCGlobal.com 37
Slide 38: Capacity in Place
CAPACITY IN PLACE Manufacturing centers in Liebenscheid, Germany and Mt. Braddock, Penn. include 193,000 sq. ft. for production, R&D and training Explosion welding shooting sites in Germany and Pennsylvania Manufacturing assets include heat treatment furnaces, linear welding centers, digital X-Ray i
Slide 39: Select End Users
SELECT END USERS Chemicals Refining Mining Engineering NobelClad provides value to its industrial and infrastructure customers by collaborating at every stage of development. During design phases, NobelClad is a key resource for process architects and engineers who often write NobelClad plates into
Slide 40: Financial Performance
Financial Performance DMCGlobal.com 40
Slide 41: DMC Financial Performance Highlights
DMC FINANCIAL PERFORMANCE HIGHLIGHTS ($ in millions except per share 2021 amounts) 2015 2016 2017 2018 2019 2020 2021 Pro Forma Sales $166.9 $158.6 $192.8 $326.4 $397.6 $229.2 $260.1 $500.5 % growth -18% -5% 22% 69% 22% (42%) 14% - Gross Profit $35.6 $38.7 $59.4 $110.7 $144.9 $56.9 $59.5 $141.6 % ma
Slide 42: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Assets ($MM) December 31, 2020 September 30, 2021 December 31, 2021 Cash, cash equivalents $28.2 $37.0 $30.8 Marketable Securities $25.7 $144.9 - Accounts receivables, net $31.4 $39.3 $71.9 Inventory $52.6 $62.2 $124.2 Total current assets $143.3 $293.4 $239.2 Total assets $
Slide 43: DMC's Performance Tenets
DMC’S PERFORMANCE TENETS DMC management has closely DMC has adopted three tenets to guide superior share price performance: aligned its interests with those 1. Maximize free cash flow through financial of its stakeholders, and all discipline decisions are made to maximize 2. Maximize return on inves
Slide 44: Contact Information
CONTACT INFORMATION Contact Primary Contact DMC Geoff High 11800 Ridge Parkway, Suite 300 Vice President of Investor Relations Broomfield, Colorado 80021, USA E [email protected] T 800-821-2666 T 303-514-0656 DMCGlobal.com 44
Slide 45: Appendix: Use of Non-GAAP Financial Measures
APPENDIX: USE OF NON-GAAP FINANCIAL MEASURES Adjusted EBITDA, adjusted operating income (loss), adjusted net Management uses adjusted EBITDA in its operational and financial Because not all companies use identical calculations, DMC’s income (loss), and net cash are non-GAAP (generally accepted decis
Slide 46: Reconciliations of Non-GAAP Measurements – DMC EBITDA and Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – DMC EBITDA AND ADJUSTED EBITDA 2021 ($MM except per share amounts) 2015 2016 2017 2018 2019 2020 2021 Pro forma Net income (loss) attributable to DMC $(24.0) $(6.5) $(18.9) $30.5 $34.0 $(1.4) $(1.0) $47.0 Interest expense $1.7 $1.1 $1.6 $1.6 $1.6
Slide 47: Reconciliations – Arcadia Pro Forma Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS – ARCADIA PRO FORMA ADJUSTED EBITDA ($MM) 2021 Pro Forma Net (loss) income $ 48,012 Depreciation 1,907 EBITDA 49,919 Adjusted EBITDA 49,919 Adjusted EBITDA attributable to redeemable noncontrolling interest 19,968 Adjusted EBITDA attributable to DMC
Slide 48: Reconciliations – DynaEnergetics EBITDA and Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS - DYNAENERGETICS EBITDA AND ADJUSTED EBITDA ($MM except per share amounts) 2015 2016 2017 2018 2019 2020 2021 Operating income (loss) $(19.2) $(5.4) $15.5 $44.5 $68.8 $6.2 $8.2 Depreciation $2.5 $3.1 $3.2 $3.8 $5.2 $6.2 $7.6 Amortization $3.7 $3.6 $
Slide 49: Reconciliations – NobelClad EBITDA and Adjusted EBITDA
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS - NOBELCLAD EBITDA AND ADJUSTED EBITDA ($MM except per share amounts) 2014 2015 2016 2017 2018 2019 2020 2021 Operating income (loss) $2.2 $5.8 $8.9 $(17.4) $6.5 $7.2 $6.9 $9.9 Depreciation $4.6 $3.8 $3.6 $3.3 $2.8 $2.7 $3.1 $3.3 Amortization $1.9 $
Slide 50: Reconciliations – Diluted EPS from Continuing Operations
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASUREMENTS - DILUTED EPS FROM CONTINUING OPERATIONS Diluted Diluted ($MM except per share amounts) Pre-tax Tax Net Pre-tax Tax Net EPS EPS Twelve months ended Dec. 31, 2020 Twelve months ended Dec. 31, 2021 Net loss attributable to DMC Global Inc. $(1.9) $(0.5