DMC Global (NASDAQ:BOOM) reported second-quarter consolidated sales of $157 million, at the high end of its forecast range, while adjusted EBITDA attributable to the company reached $10.7 million and exceeded the high end of guidance. President and CEO James O’Leary said the results reflected progress on internal initiatives despite continued pressure across the company’s construction, energy and industrial end markets.
“Despite continued headwinds in each of our end markets, many of the initiatives discussed in previous calls have been successful, notably at Arcadia,” O’Leary said.
Arcadia Leads Quarterly Improvement
Arcadia’s adjusted EBITDA margin before non-controlling-interest allocation was 13.6%, compared with 10.9% a year earlier and 6.9% in the first quarter. Chief Financial Officer Eric Walter attributed the margin improvement primarily to better fixed-cost absorption on higher sales and gains from resizing the company’s residential product offering.
The improvement came as the broader commercial construction market remained weak. O’Leary cited the American Institute of Architects’ Architecture Billings Index, which has gone 41 consecutive months without a majority of firms reporting billing growth, marking its longest downturn in more than 30 years of the index’s history.
Still, Arcadia saw stronger turnover in its short-cycle products sold through regional service centers, as well as increased demand for high-end residential windows and doors. Management said the improvement reflected efforts to restore product availability and customer service after earlier supply-chain and product-availability issues.
During the question-and-answer session, O’Leary said the company believes it has recovered much of the business that was within its control following disruptions in 2024. He added that Arcadia continues to face aluminum-cost concerns, challenging developer conditions and competitive pricing, particularly for longer-cycle projects.
Walter said a significant portion of Arcadia’s year-over-year sales increase was related to higher aluminum prices, though volumes also improved. The short-cycle storefront business, which serves small- and medium-sized glaziers and contractors, has improved in recent months and generally carries higher margins, he said.
Energy and Composite Metals Results
DynaEnergetics, DMC’s energy products business, reported sales that were flat from the prior-year period but up 13% sequentially. Adjusted EBITDA margin was 8.4%, down from 13.4% a year earlier but up from 4.6% in the first quarter.
Walter said DynaEnergetics benefited from approximately $1.5 million in tariff refunds during the second quarter, stemming from government refunds and vendor negotiations. Pricing pressure, an unfavorable sales mix and higher input costs weighed on profitability compared with the prior year. DMC’s third-quarter guidance does not assume tariff refunds, he said.
The company recently completed its first shipment of a perforating system designed for enhanced geothermal systems, or EGS. O’Leary described EGS as an emerging source of baseload power that could create an opportunity for DynaEnergetics, though management said the market remains at an early stage.
O’Leary said the company expects improved well-completion activity in North America during the second half, although the timing of that recovery remains uncertain. He also pointed to potential supply-chain and freight disruptions affecting European operations and Middle Eastern customers.
NobelClad, DMC’s composite metals business, saw second-quarter sales decline 17% from a year earlier, primarily because of lower global oil-and-gas activity. Sales rose 15% sequentially, however, due to deliveries tied to a large petrochemical order.
NobelClad’s adjusted EBITDA margin was 13.7%, compared with 16.5% a year earlier and 9.8% in the first quarter. Management said the business maintains a healthy backlog, and that increased shipments, including deliveries previously delayed by customers, are expected to support stronger second-half results.
Profitability, Liquidity and Outlook
DMC reported second-quarter SG&A expense of $24.5 million, or 15.6% of sales, down from 16.8% of sales in the year-earlier quarter and 18.1% in the first quarter. The company recorded adjusted net income attributable to DMC of $727,000, or $0.04 per diluted share.
At quarter-end, DMC had $28.6 million in cash and cash equivalents. Net debt was $30.5 million, compared with $18.7 million at the end of 2025. Walter said the increase primarily reflected higher borrowings under the company’s credit facility to fund working-capital needs. Net cash used in operating activities was $8 million during the quarter.
For the third quarter, DMC expects:
- Sales of $158 million to $168 million.
- Adjusted EBITDA attributable to DMC of $10 million to $13 million.
The outlook assumes steady Arcadia performance, higher well-completion activity at DynaEnergetics, including in oil-and-gas and EGS markets, and increased NobelClad product shipments. Management cautioned that guidance does not account for possible additional international supply-chain disruptions tied to renewed Middle East hostilities, aluminum-price volatility or weaker end-market conditions.
Arcadia Ownership Option Approaches
Walter also updated investors on the non-controlling interest in Arcadia. DMC acquired a 60% stake in the business in 2021, while its joint-venture partner retained a 40% interest with a net value at that time of about $162 million.
DMC has the right to acquire the remaining interest through a cash-settled call option. The joint-venture partner’s put option becomes exercisable Sept. 6. If the put is exercised, DMC may settle entirely in cash or with a combination of 20% cash and 80% preferred shares.
Walter said the preferred shares would be convertible on a one-for-one basis, but conversion and related voting rights would be limited to 19.9% of DMC’s outstanding common shares before issuance under Nasdaq rules. Any conversion above that threshold would require shareholder approval.
The preferred shares would be subject to equal annual cash redemptions over three years, provided DMC has legally available funds. Walter said Delaware law and the company’s board oversight prevent redemptions that could impair operations, harm creditors or threaten the company’s solvency. If shares could not be redeemed at a given time, DMC would not be in default under the preferred-share governing documents.
About DMC Global (NASDAQ:BOOM)
DMC Global Inc (NASDAQ: BOOM) is a diversified industrial company headquartered in Houston, Texas. It operates through two core business segments—EVI and MECO—that deliver engineered products and services primarily to the mining, oil and gas, and water treatment markets. The company focuses on innovation, precision manufacturing and aftermarket support to help clients improve operational efficiency and safety in challenging environments.
The EVI segment, operating under the DynaEnergetics brand, designs and manufactures explosive perforating systems, well completion tools and precision components for the non-metallic mining and oilfield services industries.
