Dmc Global Inc Stock Price, News & Analysis

Steel Connect, owning 9.9% of DMC Global (NASDAQ: BOOM), has issued a public letter criticizing DMC's board and reiterating three proposals: a $16.50 per share acquisition offer, a $185-$200 million cash purchase of DynaEnergetics and NobelClad, and a preferred stock purchase to acquire Arcadia's remaining 40% stake.

The letter highlights significant stockholder value destruction, with DMC's stock declining 57.52% over one year and 82.61% over five years. Steel Connect criticizes DMC's missed financial expectations, the problematic Arcadia acquisition, and questions the $4.5 million compensation package for Executive Chairman James O'Leary. The letter also points out leadership instability, with four CEOs in two years and over $4 million in severance payments.

Steel Connect requests a response to their DynaEnergetics and NobelClad acquisition proposal by January 31, 2025, and calls for the redemption of DMC's poison pill implemented in June 2024.

DMC Global (Nasdaq: BOOM) has reached an agreement with the Munera family, its Arcadia Products joint venture partners, to extend the put option exercise date to September 6, 2026. This modification delays the earliest date DMC can be required to purchase the remaining 40% of Arcadia, which was originally set for December 23, 2024. DMC maintains its call option right to acquire the remaining stake, exercisable from December 23, 2024.

The extension provides DMC relief from potential equity dilution and increased leverage that could have resulted from near-term satisfaction of the put obligation. The company plans to use this time to deleverage, explore strategic financing options, and improve performance of challenged businesses. Management will present new operating strategies and a simplified strategic plan focused on EBITDA growth, margin expansion, and cash conversion during the year-end earnings call in early 2025.

DMC Global (Nasdaq: BOOM) announced that Michael Kuta will retire as president, CEO and board member, effective November 29, 2024. Executive Chairman James O'Leary will serve as interim president and CEO. O'Leary, who joined the board in November 2023, brings nearly four decades of executive leadership experience, particularly in construction and industrial manufacturing. He currently serves on the board of Builders FirstSource and previously led Kaydon as chairman and CEO. O'Leary stated his priority is to address the company's current challenges and enhance stakeholder value.

DMC Global (NASDAQ: BOOM) reported challenging third quarter results with sales of $152.4 million, down 11% both sequentially and year-over-year. The company recorded a net loss of $159.4 million, largely due to a $141.7 million non-cash goodwill impairment charge at Arcadia Products. Adjusted EBITDA attributable to DMC was $5.7 million, declining 71% sequentially and 77% year-over-year.

Weakness in U.S. construction and energy services industries negatively impacted performance. For Q4 2024, DMC expects consolidated sales between $138-148 million and adjusted EBITDA of $5-8 million, reflecting challenging market conditions and high interest rates affecting luxury home sales.

DMC Global (Nasdaq: BOOM) has announced it will release its 2024 third quarter financial results after market close on Monday, November 4, 2024. The company will host a conference call and webcast at 5 p.m. Eastern (3 p.m. Mountain) following the earnings release. Investors can access the call by dialing 877-407-5783 (international: +1-201-689-8782) or listen to the webcast via their website. A replay will be available for six months.

DMC Global (NASDAQ: BOOM) has revised its Q3 2024 financial guidance, expecting sales of approximately $152 million, down from the previous $158-$168 million forecast. Adjusted EBITDA is now projected at $5 million, significantly lower than the earlier $15-$18 million guidance. The company will record a $142 million non-cash goodwill impairment charge related to its Arcadia acquisition.

DMC's Board has ended the active marketing of DynaEnergetics and NobelClad, prioritizing internal improvements. Governance changes include James O'Leary becoming executive chairman and Ouma Sananikone appointed as lead independent director. David Aldous has stepped down as independent chairman and board member, while Peter Rose will not seek re-election.

The company cites weak commercial construction activity, supply-chain disruptions, and declining North American well-completion activity as factors impacting performance. DMC expects to report detailed Q3 results on November 4, 2024.

DMC Global (NASDAQ: BOOM) has responded to Steel Connect's unsolicited acquisition offers. The Board of Directors has repeatedly invited Steel Connect to participate in its strategic alternatives review, subject to standard terms. However, Steel Connect has rejected requests to enter a customary non-disclosure agreement and a 30-day standstill agreement. Steel Connect's demand for details of all offers from other participants is deemed unacceptable. The Board remains open to engaging with Steel Connect under conditions that protect all stockholders' rights. DMC emphasizes that there is no assurance of any transaction or alternative resulting from this process, nor any timeline for completion. The company has retained BofA Securities as financial advisor, along with legal, stockholder, and communications advisors to assist in the process.

Steel Connect has reiterated its proposal to acquire DMC Global Inc. (NASDAQ: BOOM) for $16.50 per share in cash, representing a 51% premium to DMC's current share price. Steel Connect, which owns 9.8% of DMC's outstanding shares, expressed frustration with the lack of progress since their initial offer in May 2024. The company criticized DMC's board for not engaging in discussions and for actions deemed detrimental to shareholders. As an alternative, Steel Connect is open to acquiring DMC's DynaEnergetics and NobelClad businesses for approximately $185 million. Steel Connect warned it may consider all potential alternatives, including a possible tender offer, if DMC continues to refuse discussions.

DMC Global Inc. (Nasdaq: BOOM) reported its Q2 2024 financial results, with sales of $171.2 million, up 3% sequentially but down 9% year-over-year. Net income was $6.3 million, with $4.0 million attributable to DMC. Adjusted EBITDA attributable to DMC was $19.4 million, up 16% sequentially but down 39% year-over-year. The company's three businesses - Arcadia, DynaEnergetics, and NobelClad - showed mixed results. Arcadia saw improved margins despite weak construction spending. DynaEnergetics faced softer demand in the U.S. onshore market. NobelClad reported increased order backlog. DMC expects Q3 2024 consolidated sales between $158M - $168M and adjusted EBITDA attributable to DMC of $15M - $18M.