DMC Global earns $9.71M in Q3 2026 turnaround
One DynaEnergetics customer accounted for approximately 20% of consolidated third-quarter sales and 26% of accounts receivable as of September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
DMC Global Inc. reported third-quarter 2026 net sales of $172.825 million, up 14% year over year, and net income attributable to DMC stockholders of $9.708 million versus a $3.081 million loss a year earlier. Gross margin was 26.9%, compared with 21.7%; DMC attributed the improvement partly to $5.425 million of tariff refunds recognized at DynaEnergetics.
Nine-month sales were $465.373 million versus $466.309 million. Adjusted EBITDA attributable to DMC was $33.583 million versus $36.493 million, and operating cash flow was $7.170 million versus $38.340 million. NobelClad backlog was $72.361 million at September 30, 2026, versus $63.508 million at June 30, 2026.
Arcadia Products’ minority holder could exercise the Put Option beginning September 6, 2026, but had not exercised it as of September 30, 2026. The purchase-price floor for its 40% interest is $187.080 million, subject to adjustments. If exercised, DMC may pay cash or 20% cash and 80% newly designated preferred stock, which would carry 3% annual dividends and initially cap voting and conversion at 19.9% of DMC common shares outstanding immediately before issuance, subject to stockholder approval to remove the cap.
2 points · 0 major0 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter net sales rose 14% to $172.825 million year over year.
- Moderate pointDMC stockholders reported $9.708 million in income, versus a $3.081 million loss.
Negative
- Moderate pointNine-month operating cash flow was $7.170 million, versus $38.340 million.
- Moderate pointNine-month adjusted EBITDA attributable to DMC declined 8% to $33.583 million.
- Minor point. Forward-looking: it has not happened yet and may not happen.Put Preferred issuance and cap removal could give its holder majority voting control.
Filing Explained
If exercised and paid partly in preferred stock, removing its cap by vote could give the Arcadia seller majority voting control.
DMC says the Arcadia minority holder had not exercised the Put Option through this filing; if preferred stock is issued and stockholders approve removing its voting and conversion cap, the seller could gain majority voting control through dilution of existing holders.
If the preferred stock is issued, proportionate annual redemptions would begin on
Key Figures
Third-quarter net sales: $172.825 million
Net income attributable to DMC stockholders: $9.708 million
Gross margin: 26.9%
+4 more
7 metrics
Third-quarter net sales
$172.825 million
Three months ended September 30, 2026; up 14% from 2025
Net income attributable to DMC stockholders
$9.708 million
Three months ended September 30, 2026; versus a $3.081 million loss in 2025
Gross margin
26.9%
Three months ended September 30, 2026; compared with 21.7% in 2025
Operating cash flow
$7.170 million
Nine months ended September 30, 2026; compared with $38.340 million in 2025
Adjusted EBITDA attributable to DMC
$33.583 million
Nine months ended September 30, 2026; compared with $36.493 million in 2025
NobelClad order backlog
$72.361 million
At September 30, 2026; compared with $63.508 million at June 30, 2026
Tariff refunds recognized
$5.425 million
DynaEnergetics; benefit within costs of products sold for the three months ended September 30, 2026
Key Terms
Adjusted EBITDA attributable to DMC Global Inc., Put Option, redeemable noncontrolling interest, leverage ratio
4 terms
Adjusted EBITDA attributable to DMC Global Inc. financial
"Adjusted EBITDA attributable to DMC Global Inc."
Put Option financial
"The Put Option became exercisable on September 6, 2026"
A put option is a financial contract that gives its holder the right, but not the obligation, to sell a specified quantity of a stock or other asset at a set price within a defined time. Think of it like insurance on an investment—if the asset’s market price falls, the put lets an investor lock in a higher sale price or profit from the decline, helping limit losses or speculate on downward moves.
redeemable noncontrolling interest financial
"the redeemable noncontrolling interest was $187,080"
A redeemable noncontrolling interest is a minority ownership stake in a business that the minority owner can require to be bought back for cash or that must be redeemed under set conditions. Investors care because it is not permanent equity: it represents a foreseeable cash obligation and can reduce the parent company’s reported equity and available cash, much like a loan from a roommate you must repay on request rather than shared ownership of the house.
leverage ratio financial
"The Company’s leverage ratio ... was 1.41x"
Leverage ratio measures how much a company relies on borrowed money compared with its own funds or assets, typically expressed as debt relative to equity or total assets. Like a homeowner with a mortgage, higher leverage can amplify returns when business is strong but also raises the chance of big losses or default if revenue falls, so investors use it to judge financial risk and resilience.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue and net income did DMC Global (BOOM) report in Q3 2026?
DMC Global reported net sales of $172.825 million and net income attributable to DMC stockholders of $9.708 million for third-quarter 2026, versus $151.532 million and a $3.081 million loss a year earlier. Gross margin was 26.9%, compared with 21.7%.
What are the terms of DMC Global’s Arcadia Products Put Option?
The Arcadia Products minority holder could sell its remaining 40% interest to DMC under the Put Option, which became exercisable on September 6, 2026; DMC said it remained unexercised as of September 30, 2026. If preferred stock is used for payment, proportionate annual redemptions would begin June 23, 2027, and the stock must be redeemed by its third anniversary, subject to legally available funds.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
For the quarterly period ended September 30, 2026
OR
FOR THE TRANSITION PERIOD FROM ______ TO ______
Commission file number 001-14775
(Exact name of Registrant as Specified in its Charter)
| (State of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices, including zip code)
(303 ) 665-5700
(Registrant’s telephone number, including area code)
| Title of each class | Trading Symbol | Name of exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ | ||||||||
Non-accelerated filer ☐ | Smaller reporting company | |||||||
Emerging growth company | ||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 under the Act). Yes ☐ No ☑
The number of shares of Common Stock outstanding was 20,540,949 as of October 20, 2026.
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend the forward-looking statements throughout this quarterly report on Form 10-Q to be covered by the safe harbor provisions for forward-looking statements. Statements contained in this report which are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. These statements can sometimes be identified by our use of forward-looking words such as “may,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” “seek,” and other phrases of similar meaning. Such statements include, but are not limited to, expectations regarding the impact of volatility of energy markets, the conflict between the United States, Israel, and Iran and related geopolitical instability, evolving global tariff policies on sales and profitability, tariff recoverability, market-responsive initiatives at Arcadia Products, cost reduction and market share expansion initiatives at DynaEnergetics, order activity improvements and shipment timing at NobelClad, market opportunities at NobelClad, our ability to access capital markets transactions in the future, our ability to redeem a newly designated series of preferred stock (if issued in connection with the right of the minority interest holder of Arcadia Products to sell its remaining interest in Arcadia Products to us), the availability of funds to support our liquidity position and our expected future liquidity position. The forward-looking information is based on information available as of the date of this quarterly report and on numerous assumptions and developments that are not within our control. Although we believe that our expectations as expressed in these forward-looking statements are reasonable, we cannot assure you that our expectations will turn out to be correct. Factors that could cause actual results to differ materially include, but are not limited to, those factors referenced in our Annual Report on Form 10-K for the year ended December 31, 2025 and this Quarterly Report on Form 10-Q and other potential factors, including: geopolitical and economic instability, including recessions or depressions; inflation; supply chain delays and disruptions; the availability and cost of energy; transportation disruptions; the ability to obtain new contracts at attractive prices; the size and timing of customer orders and shipments; product pricing and margins; our ability to realize sales from our backlog; fluctuations in customer demand; fluctuations in foreign currencies; competitive factors; the timely completion of contracts; the timing and size of expenditures; the timely receipt of government approvals and permits; the price and availability of metal, aluminum, and other raw materials; fluctuations in tariffs or quotas; changes in laws and regulations, both domestic and foreign, impacting our business and the business of the end-market users we serve; the adequacy of local labor supplies at our facilities; changes in immigration laws or enforcement programs; current or future limits on manufacturing capacity at our various operations; the impact of pending or future litigation or regulatory matters; the availability and cost of funds; our ability to access our borrowing capacity under our credit facility or access the capital markets; the actions of activist stockholders; global economic conditions; and wars, terrorism and armed conflicts. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. We undertake no obligation to publicly release the results of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
TABLE OF CONTENTS
| Page | ||||||||
PART I - FINANCIAL INFORMATION | ||||||||
Item 1 | Condensed Consolidated Financial Statements | 4 | ||||||
Condensed Consolidated Balance Sheets as of September 30, 2026 (unaudited) and December 31, 2025 | 4 | |||||||
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 (unaudited) | 5 | |||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2026 and 2025 (unaudited) | 6 | |||||||
Condensed Consolidated Statements of Stockholders’ Equity and Redeemable Noncontrolling Interest for the three and nine months ended September 30, 2026 and 2025 (unaudited) | 7 | |||||||
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025 (unaudited) | 9 | |||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | 10 | |||||||
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 | ||||||
Item 3 | Quantitative and Qualitative Disclosure about Market Risk | 43 | ||||||
Item 4 | Controls and Procedures | 43 | ||||||
PART II - OTHER INFORMATION | ||||||||
Item 1 | Legal Proceedings | 44 | ||||||
Item 1A | Risk Factors | 44 | ||||||
Item 5 | Other Information | 44 | ||||||
Item 6 | Exhibits | 45 | ||||||
Signatures | 45 | |||||||
3
Table of Contents
Part I - FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements
DMC GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment | |||||||||||
| Less - accumulated depreciation | ( | ( | |||||||||
| Property, plant and equipment, net | |||||||||||
| Purchased intangible assets, net | |||||||||||
| Deferred tax assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Accrued income taxes | |||||||||||
| Accrued employee compensation and benefits | |||||||||||
| Contract liabilities | |||||||||||
| Current portion of long-term debt | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred tax liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
| Redeemable noncontrolling interest | |||||||||||
| Stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
| Other cumulative comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost, and company stock held for deferred compensation, at par; | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities, redeemable noncontrolling interest, and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
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DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Share and Per Share Data)
(unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Selling and distribution expenses | |||||||||||||||||||||||
| Amortization of purchased intangible assets | |||||||||||||||||||||||
| Strategic review and related expenses | |||||||||||||||||||||||
| Restructuring expenses and asset impairments | |||||||||||||||||||||||
| Total costs and expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Other income (expense), net | ( | ( | ( | ||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) before income taxes | ( | ||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ||||||||||||||||||
| Less: Net income attributable to redeemable noncontrolling interest | |||||||||||||||||||||||
| Net income (loss) attributable to DMC Global Inc. stockholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Net income (loss) per share attributable to DMC Global Inc. stockholders: | |||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
Reconciliation to net income (loss) attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest for purposes of calculating earnings per share
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) attributable to DMC Global Inc. stockholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Adjustment of redeemable noncontrolling interest | ( | ||||||||||||||||||||||
| Net income (loss) attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest | $ | $ | ( | $ | $ | ( | |||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5
Table of Contents
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in Thousands)
(unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | ( | ( | |||||||||||||||||||||
| Other comprehensive income (loss) | $ | $ | ( | $ | $ | ||||||||||||||||||
| Less: comprehensive income attributable to redeemable noncontrolling interest | |||||||||||||||||||||||
| Comprehensive income (loss) attributable to DMC Global Inc. stockholders | $ | $ | ( | $ | $ | ||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6
Table of Contents
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST
(Amounts in Thousands, Except Share Data)
(unaudited)
| Other | Treasury Stock, at cost, and | Total | Redeemable | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Additional | Accumulated | Cumulative | Company Stock Held for | DMC Global Inc. | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Paid-In | Comprehensive | Deferred Compensation, at par | Stockholders’ | Controlling | ||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Loss | Shares | Amount | Equity | Interest | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | — | — | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
| Share activity in connection with stock compensation plans | ( | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity | — | — | — | — | — | ( | ( | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | — | — | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
| Share activity in connection with stock compensation plans | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity | — | — | — | — | — | ( | ( | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | — | — | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Balances, September 30, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
7
Table of Contents
DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST
(Amounts in Thousands, Except Share Data)
(unaudited)
| Other | Treasury Stock, at cost, and | Total | Redeemable | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Additional | Retained | Cumulative | Company Stock Held for | DMC Global Inc. | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Paid-In | Earnings | Comprehensive | Deferred Compensation, at par | Stockholders’ | Controlling | |||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | (Deficit) | Loss | Shares | Amount | Equity | Interest | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share activity in connection with stock compensation plans | ( | — | — | ( | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to redeemable noncontrolling interest holder | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity | — | — | — | — | — | ( | ( | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Share activity in connection with stock compensation plans | ( | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to redeemable noncontrolling interest holder | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest | — | — | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity | — | — | — | — | — | ( | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, June 30, 2025 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Change in cumulative foreign currency translation adjustment | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Share activity in connection with stock compensation plans | ( | — | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment of redeemable noncontrolling interest | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock activity | — | — | — | — | — | ( | ( | — | |||||||||||||||||||||||||||||||||||||||||||||
| Balances, September 30, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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DMC GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(unaudited)
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
| Depreciation | |||||||||||
| Amortization of purchased intangible assets | |||||||||||
| Amortization of deferred debt issuance costs | |||||||||||
| Stock-based compensation | |||||||||||
| Bad debt expense | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Asset impairments | |||||||||||
Other, net | ( | ||||||||||
| Change in: | |||||||||||
| Accounts receivable, net | ( | ( | |||||||||
| Inventories | ( | ||||||||||
| Prepaid expenses and other | |||||||||||
| Accounts payable | |||||||||||
| Contract liabilities | ( | ||||||||||
| Accrued expenses and other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Acquisition of property, plant and equipment | ( | ( | |||||||||
| Proceeds from property, plant and equipment reimbursements | |||||||||||
| Proceeds on sale of property, plant and equipment | |||||||||||
| Proceeds from settlement of note receivable | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayments on term loan | ( | ( | |||||||||
| Borrowings on revolving loans | |||||||||||
| Repayments on revolving loans | ( | ( | |||||||||
| Payment of debt issuance costs | ( | ||||||||||
| Distributions to redeemable noncontrolling interest holder | ( | ||||||||||
| Treasury stock purchases | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effects of exchange rates on cash | ( | ||||||||||
| Net increase in cash and cash equivalents | |||||||||||
| Cash and cash equivalents, beginning of the period | |||||||||||
| Cash and cash equivalents, end of the period | $ | $ | |||||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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DMC GLOBAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands, Except Share and Per Share Data)
(unaudited)
1. BASIS OF PRESENTATION
The information included in the Condensed Consolidated Financial Statements is unaudited but includes all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the interim periods presented. Certain information and footnote disclosures, including critical and significant accounting policies normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted for this quarterly presentation. These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements that are included in our Annual Report filed on Form 10-K for the year ended December 31, 2025.
2. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The Condensed Consolidated Financial Statements include the accounts of DMC Global Inc. (“DMC”, “we”, “us”, “our”, or the “Company”) and its controlled subsidiaries. All intercompany accounts, profits, and transactions have been eliminated in consolidation.
Accounts Receivable
The Company measures expected credit losses for its accounts receivable using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company has disaggregated pools of accounts receivable balances by business, geography and/or customer risk profile and has used history and other experience to establish an allowance for credit losses at the time the receivable is recognized. To measure expected credit losses, we have elected to pool trade receivables by segment and analyze each segment’s accounts receivable balances as separate populations. Within each segment, receivables exhibit similar risk characteristics.
The following table summarizes year-to-date activity in the allowance for credit losses on receivables from customers in each of our business segments:
| Arcadia Products | DynaEnergetics | NobelClad | DMC Global Inc. | ||||||||||||||||||||
Allowance for doubtful accounts, December 31, 2025 | $ | $ | $ | $ | |||||||||||||||||||
| Current period provision for expected credit losses | |||||||||||||||||||||||
| Write-offs charged against the allowance | ( | ( | |||||||||||||||||||||
| Recoveries of amounts previously reserved | ( | ( | ( | ||||||||||||||||||||
| Impacts of foreign currency exchange rates and other | ( | ( | ( | ||||||||||||||||||||
Allowance for doubtful accounts, September 30, 2026 | $ | $ | $ | $ | |||||||||||||||||||
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Contract Liabilities
| September 30, 2026 | December 31, 2025 | ||||||||||
Arcadia Products | $ | $ | |||||||||
| DynaEnergetics | |||||||||||
| NobelClad | |||||||||||
| Total | $ | $ | |||||||||
We generally expect to recognize the revenue associated with contract liabilities over a time period no longer than one year, but unforeseen circumstances can cause delays in shipments associated with contract liabilities, primarily supply chain delays and disruptions.
Redeemable Noncontrolling Interest
On December 23, 2021, DMC completed the acquisition of 60 % of the membership interests in Arcadia Products, LLC, a Colorado limited liability company resulting from the conversion of Arcadia, Inc. (collectively, “Arcadia Products”). The limited liability company operating agreement for Arcadia Products (the “Operating Agreement”) contains a right for the Company to purchase the remaining interest in Arcadia Products from the minority interest holder on or after December 23, 2024 (“Call Option”). Similarly, the Operating Agreement permits the minority interest holder of Arcadia Products the right to sell its remaining interest in Arcadia Products to the Company (“Put Option”). The Put Option became exercisable on September 6, 2026. As of September 30, 2026, and through the date of the filing of this report, the minority interest holder has not exercised the Put Option.
The purchase price for any interests sold pursuant to the Call Option or Put Option is based upon a predefined calculation as included within the Operating Agreement. The calculation is based on a multiple of Arcadia Products’ adjusted EBITDA over a defined period or, if higher, a “Floor Value” for 100 % of Arcadia Products equal to $467,700 (or $187,080 40 % interest), in each case subject to certain adjustments. In connection with an exercise of the Call Option, the Operating Agreement would require payment of the purchase price in cash. However, in connection with the exercise of the Put Option, the Operating Agreement permits the Company the option to pay the purchase price in either cash, or 20 % in cash and 80 % in shares of a newly designated series of preferred stock (the “Put Preferred”) that would be authorized at that time. The terms of the Put Preferred, including the rights, powers and preferences thereof, as set forth in the Operating Agreement, would be replicated in a Certificate of Designations to be filed with the Secretary of State of the State of Delaware.
The number of shares of Put Preferred to be issued in connection with the Put Option (if the Company utilizes that payment mechanism) would be initially determined and valued at the volume weighted average trading price of the Company’s common stock over the 60 days preceding the delivery of the Put Option notice. The Put Preferred would be entitled to dividends at a rate of 3 % per annum and would vote with and be convertible into one share of the Company’s common stock. However, in order to comply with applicable Nasdaq rules, the voting and conversion rights of the Put Preferred would initially be limited to 19.9 % of the number of shares of DMC common stock outstanding immediately prior to the issuance of the Put Preferred. This voting and conversion cap would be removed only if such removal is approved by DMC’s stockholders. The holder of the Put Preferred would not be allowed to participate in any such stockholder vote. Based on the purchase price definition set forth in the Operating Agreement and the current price of DMC common stock, it is likely that if the Put Preferred is issued, a stockholder vote to remove the voting and conversion cap would result in the minority interest holder acquiring majority voting control of the Company through the involuntary dilution of the existing stockholders.
Upon issuance, the Company may redeem the Put Preferred at any time; however, beginning on June 23, 2027, the Company would begin proportionate annual redemptions of the Put Preferred, provided that the Put Preferred must be redeemed by the third anniversary of its issuance, subject in all cases to the availability of sufficient funds to effect such redemptions as described below.
The Company’s ability to redeem the Put Preferred, including its ability to make the mandatory redemptions described above, is subject to certain statutory and common law limitations under Delaware law. Under Section 160(a) of the General Corporation Law of the State of Delaware (the “DGCL”), a corporation may not purchase or redeem its own shares of capital stock when the capital of the corporation is, or as a result of such transaction would be, impaired. Further, the Delaware courts
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have stated that a corporation may not redeem shares if doing so “diminishes the ability of the company to pay its debts, or lessens the security of its creditors.” Accordingly, the Company may be restricted from making redemption payments if its capital is impaired, if making the payments would impair its capital or in other circumstances, including where the payment would threaten its ability to continue as a going concern.
In assessing whether the Company has funds legally available to redeem some or all of the Put Preferred, the Company’s board of directors (the “Board”) will be required to make a good faith determination, based upon available data and by methods that the Board reasonably believes reflect present values, as to whether the Company can meet the statutory surplus and common law requirements for each redemption. Such determination may include consideration of the fair value of the Company’s assets and liabilities, including any contingent liabilities discounted for probability and timing, the Company’s projected cash flows and liquidity needs. There can be no assurance that the Company will meet the Delaware statutory surplus and common law requirements to redeem the Put Preferred on the scheduled redemption dates. If the Company does not redeem the Put Preferred as contemplated by the Certificate of Designations because it lacks sufficient legally available funds to do so, Delaware case law indicates that (i) the Company will not be in default under the Certificate of Designations and (ii) the holder of the Put Preferred will not be able to exercise the remedies that would be available to a creditor in the case of a defaulted contractual obligation. In such an event, the Put Preferred, to the extent not redeemed or converted, would remain outstanding and would continue to accrue interest at 3 % per annum until such time as the Company has sufficient funds lawfully available to effect the redemption. If the Company does not have sufficient funds lawfully available to redeem the Put Preferred and the Company’s stockholders do not approve the removal of the Put Preferred’s voting and conversion cap, the Put Preferred, other than the 19.9 % that may be converted into DMC common stock without a vote of stockholders, will remain outstanding.
Given that the noncontrolling interest in Arcadia Products is subject to possible redemption with redemption rights that are not entirely within the control of the Company, we have concluded that the noncontrolling interest should be accounted for in accordance with ASC 480 Distinguishing Liabilities from Equity (“ASC 480”). The noncontrolling interest is also probable of redemption, as the only criteria for the security to become redeemable is the passage of time. As such, the redeemable noncontrolling interest is classified in temporary equity, separate from the stockholders’ equity section, in the Condensed Consolidated Balance Sheets.
At each balance sheet date subsequent to acquisition, two separate calculations must be performed to determine the value of the redeemable noncontrolling interest. First, the redeemable noncontrolling interest must be accounted for in accordance with ASC 810 Consolidation (“ASC 810”) whereby income (loss) and cash distributions attributable to the redeemable noncontrolling interest holder are ascribed. After this occurs, applicable provisions of ASC 480 must be considered to determine whether any further adjustment is necessary to increase the carrying value of the redeemable noncontrolling interest. An adjustment would only be necessary if the estimated settlement amount of the redeemable noncontrolling interest, per the terms of the Operating Agreement, exceeds the carrying value calculated in accordance with ASC 810. If such adjustment is required, the impact is immediately recorded to retained earnings and additional paid-in capital, upon absence of retained earnings, and therefore does not impact the Condensed Consolidated Statements of Operations or Comprehensive (Loss) Income. As of September 30, 2026, and December 31, 2025, the redeemable noncontrolling interest was $187,080
Promissory Note
In order to equalize after-tax consideration to the redeemable noncontrolling interest holder relative to an alternative transaction structure, immediately following the closing of the acquisition, the Company loaned $24,902 to the redeemable noncontrolling interest holder. The loan was evidenced by an unsecured promissory note, and the loan will be repaid out of proceeds from the sale of the redeemable noncontrolling interest holder’s interests in Arcadia Products, whether received upon exercise of the Put Option, the Call Option or upon sale to third parties permitted under the terms of the Operating Agreement. The loan must be repaid in full at the earlier of the exercise of the Put or Call Option, or by December 16, 2051, and has been recorded within “Other assets” in the Condensed Consolidated Balance Sheets.
Revenue Recognition
The Company’s revenues are derived from consideration paid by customers for tangible goods. The Company analyzes its different products by segment to determine the appropriate basis for revenue recognition. Revenue is not generated from sources other than contracts with customers and revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. There are no material upfront costs for operations that are incurred from contracts with customers.
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See additional revenue recognition policy disclosures specific to each of our business segments within our Annual Report filed on Form 10-K for the year ended December 31, 2025.
Income Taxes
We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. The deferred income tax impact of tax credits are recognized as an immediate adjustment to income tax expense. We recognize deferred tax assets for the expected future effects of all deductible temporary differences to the extent we believe these assets will more likely than not be realized. We record a valuation allowance when, based on current circumstances, it is more likely than not that all or a portion of the deferred tax assets will not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, recent financial performance and existing valuation allowances, if any.
We recognize the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the Condensed Consolidated Financial Statements from such a position are measured as the largest benefit that is more likely than not to be realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense.
Earnings Per Share
In periods with net income, the Company computes earnings per share (“EPS”) using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared and participation rights in undistributed earnings. Restricted stock awards (“RSAs”) granted under the 2016 Omnibus Incentive Plan are considered participating securities in periods of net income as they receive non-forfeitable rights to dividends as common stock. RSAs do not participate in net losses. RSAs granted under the 2025 Omnibus Incentive Plan are non-participating securities as they do not receive non-forfeitable rights to dividends as common stock.
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applicable periods presented, diluted EPS using the two-class method was more dilutive than the treasury stock method; as such, only the two-class method has been included below.
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) attributable to DMC Global Inc. stockholders, as reported | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Adjustment of redeemable noncontrolling interest | ( | ||||||||||||||||||||||
| Less: Undistributed net income available to participating securities | ( | ( | |||||||||||||||||||||
| Numerator for basic net income (loss) per share: | ( | ( | |||||||||||||||||||||
| Add: Undistributed net income allocated to participating securities | |||||||||||||||||||||||
| Less: Undistributed net income reallocated to participating securities | ( | ( | |||||||||||||||||||||
| Numerator for diluted net income (loss) per share: | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares outstanding for basic net income (loss) per share | |||||||||||||||||||||||
Effect of dilutive securities (1) | |||||||||||||||||||||||
| Weighted average shares outstanding for diluted net income (loss) per share | |||||||||||||||||||||||
| Net income (loss) per share attributable to DMC Global Inc. stockholders | |||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
(1) For the three and nine months ended September 30, 2026, 31,361 and 56,517 shares, respectively, have been excluded as their effect would have been anti-dilutive. Given that we were in a net loss position for the three and nine months ended September 30, 2025, all potentially dilutive shares were anti-dilutive and therefore excluded from the determination of diluted EPS.
Deferred Compensation Plan
The Company maintains a Non-Qualified Deferred Compensation Plan (the “Plan”) as part of its overall compensation package for certain employees. Until enrollment in the Plan was suspended effective January 1, 2025, participants were eligible to defer a portion of their annual salary, their annual incentive bonus, and their equity awards through the Plan on a tax-deferred basis. Deferrals into the Plan were not matched or subsidized by the Company, nor were they eligible for above-market or preferential earnings.
The Plan provides for deferred compensation obligations to be settled either by delivery of a fixed number of shares of DMC’s common stock or in cash, in accordance with participant contributions and elections. For deferred equity awards, subsequent to equity award vesting and after a period prescribed by the Plan, participants previously could elect to diversify contributions of equity awards into other investment options available to Plan participants. Once diversified, such amounts are settled in cash.
The Company has established a grantor trust commonly known as a “rabbi trust” and contributed certain assets to partially satisfy the future obligations to participants in the Plan. These assets are subject to potential claims of the Company’s general creditors. The assets held in the trust primarily include company-owned life insurance (“COLI”) on certain current and former employees and money market funds. COLI is accounted for at the cash surrender value while money market funds held by the trust are accounted for at fair value.
Deferred unvested RSAs and deferred common stock held by the trust are reflected in the Condensed Consolidated Balance Sheets within “Treasury stock, at cost, and company stock held for deferred compensation, at par” at the par value of the common stock or unvested RSAs. These accounts are not adjusted for subsequent changes in the fair value of the common stock.
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Deferred compensation obligations that will be settled in cash are accounted for on an accrual basis in accordance with the terms of the Plan. These obligations are adjusted based on changes in value of the underlying investment options chosen by Plan participants. Deferred compensation obligations that will be settled by delivery of a fixed number of previously vested shares of the Company’s common stock are reflected in the Condensed Consolidated Statements of Stockholders’ Equity and Redeemable Noncontrolling Interest within “Common stock” at the par value of the common stock or unvested RSAs. These accounts are not adjusted for subsequent changes in the fair value of the common stock.
The balances related to the deferred compensation plan were as follows for the periods presented. The amounts included within “Prepaid expenses and other” and “Other current liabilities” pertain to scheduled distributions per the terms of the Plan that will occur within twelve months of September 30, 2026.
| Balance Sheet location | September 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Deferred compensation assets | Prepaid expenses and other | $ | $ | |||||||||||||||||
| Deferred compensation assets | Other assets | $ | $ | |||||||||||||||||
| Deferred compensation obligations | Other current liabilities | $ | $ | |||||||||||||||||
| Deferred compensation obligations | Other long-term liabilities | $ | $ | |||||||||||||||||
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants at the measurement date. We are required to use an established hierarchy for fair value measurements based upon the inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows:
•Level 1 — Inputs to the valuation based upon quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date.
•Level 2 — Inputs to the valuation include quoted prices in either markets that are not active, or in active markets for similar assets or liabilities, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data.
•Level 3 — Inputs to the valuation that are unobservable inputs for the asset or liability.
The highest priority is assigned to Level 1 inputs and the lowest priority to Level 3 inputs.
The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value. The carrying value of our revolving loans and term loan under our credit facility, as well as the European line of credit, when outstanding, also approximate their fair value because of the variable interest rate associated with these instruments, which reset each month at market interest rates. All of these account balances are considered Level 1 assets and liabilities.
We did not have any Level 3 assets or liabilities recorded as of September 30, 2026, or December 31, 2025.
Restructuring Expenses and Asset Impairments
Restructuring expenses are incurred from time to time to improve operational efficiency across our businesses. During the three and nine months ended September 30, 2026, we recorded total restructuring expenses of $94 899
During the three and nine months ended September 30, 2025, we recorded total restructuring expenses and asset impairments of $1,202 and $2,676 , respectively. Expenses incurred during the nine months ended September 30, 2025 included contract termination costs associated with exiting a lease at NobelClad of $1,013 , an asset impairment charge and related
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contract termination costs associated with exiting a lease at DynaEnergetics of $605 , and employee severance associated with headcount reductions across all three business segments of $1,058
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires public business entities to disclose more detailed information about the types of expense in commonly presented expense captions to provide investors with more transparent and detailed expense information. The guidance is effective for fiscal years beginning after December 15, 2026 on a prospective basis. Early adoption and retrospective application of the amendments are permitted. The Company is within the scope of this ASU and expects to adopt ASU 2024-03 for annual reporting periods beginning on January 1, 2027 and interim reporting periods beginning on January 1, 2028.
We have considered all other recent accounting pronouncements issued, but not yet effective, and we do not expect any to have a material effect on the Company’s Condensed Consolidated Financial Statements.
3. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Significant cost elements included in inventory are raw materials, labor, freight, subcontract costs, and manufacturing overhead. As necessary, we write down inventory to its net realizable value by recording provisions for excess, slow moving and obsolete inventory. To determine provision amounts, we regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments.
Inventories consisted of the following at September 30, 2026:
Arcadia Products | DynaEnergetics | NobelClad | DMC Global Inc. | ||||||||||||||||||||
| Raw materials | $ | $ | $ | $ | |||||||||||||||||||
| Work-in-process | |||||||||||||||||||||||
| Finished goods | |||||||||||||||||||||||
| Supplies | |||||||||||||||||||||||
| Total inventories | $ | $ | $ | $ | |||||||||||||||||||
Inventories consisted of the following at December 31, 2025:
Arcadia Products | DynaEnergetics | NobelClad | DMC Global Inc. | ||||||||||||||||||||
| Raw materials | $ | $ | $ | $ | |||||||||||||||||||
| Work-in-process | |||||||||||||||||||||||
| Finished goods | |||||||||||||||||||||||
| Supplies | |||||||||||||||||||||||
| Total inventories | $ | $ | $ | $ | |||||||||||||||||||
4. PURCHASED INTANGIBLE ASSETS
Our purchased intangible assets consisted of the following at September 30, 2026:
| Gross | Accumulated Amortization | Net | |||||||||||||||
| Customer relationships | $ | $ | ( | $ | |||||||||||||
| Trademarks / Trade names | ( | ||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | |||||||||||||
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Our purchased intangible assets consisted of the following at December 31, 2025:
| Gross | Accumulated Amortization | Net | |||||||||||||||
| Customer relationships | $ | $ | ( | $ | |||||||||||||
| Trademarks / Trade names | ( | ||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | |||||||||||||
5. LEASES
The Company leases real properties for use in manufacturing and as administrative and sales offices, and leases automobiles and office equipment. Nearly all of the Company’s leasing arrangements are classified as operating leases. Right-of-use (“ROU”) asset and lease liability balances were as follows for the periods presented:
| September 30, 2026 | December 31, 2025 | ||||||||||
| ROU asset | $ | $ | |||||||||
| Current lease liability | $ | $ | |||||||||
| Long-term lease liability | |||||||||||
| Total lease liability | $ | $ | |||||||||
The ROU asset is reported in “Other assets” while the current lease liability is reported in “Other current liabilities” and the long-term lease liability is reported in “Other long-term liabilities” in the Company’s Condensed Consolidated Balance Sheets. Cash paid for operating lease liabilities is recorded as operating cash outflows in the Company’s Condensed Consolidated Statements of Cash Flows.
6. DEBT
Outstanding borrowings consisted of the following at:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Syndicated credit agreement: | |||||||||||
| U.S. Dollar revolving loan | $ | $ | |||||||||
| Term loan | |||||||||||
| European line of credit | |||||||||||
| Outstanding borrowings | |||||||||||
| Less: debt issuance costs | ( | ( | |||||||||
| Total debt | |||||||||||
| Less: current portion of long-term debt | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
Syndicated Credit Agreement
On February 6, 2024, the Company and certain domestic subsidiaries entered into an amendment (the “First Amendment”) to its existing credit agreement with a syndicate of banks, led by KeyBank National Association (the “credit facility”). The First Amendment provided for certain changes to the credit facility and increased the maximum commitment amount from $200,000 to $300,000 . The credit facility originally allowed for revolving loans of up to $200,000 , a $50,000 term loan facility, and a $50,000 delayed draw term loan (“DDTL”) facility. On February 6, 2026, the ability of the Company to access the $50,000 DDTL facility expired per the terms of the First Amendment. The $50,000 term loan facility is payable in installments of $938 per quarter through March 31, 2028. Quarterly term loan payments increase to $1,250 from June 30, 2028, through December 31, 2028. A balloon payment for the outstanding term loan balance is due upon the credit facility maturity date of February 6, 2029. The credit facility retains a $100,000 accordion feature to increase the commitments under the revolving loan and/or by adding one or more term loans subject to approval by the applicable lenders. The credit facility is secured by certain assets of DMC including accounts receivable, inventory, and fixed assets, including Arcadia Products and its
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subsidiary, as well as guarantees and share pledges by DMC and its subsidiaries. The revolving loan can also be used to issue bank guarantees to customers to secure their advanced payments. As of September 30, 2026, and December 31, 2025, bank guarantees of $3,173 and $800 , respectively, were secured.
Borrowings under the $200,000 revolving loan limit and $50,000 term loan can be in the form of Adjusted Daily Simple Secured Overnight Financing Rate (“SOFR”) loans or one month Adjusted Term SOFR loans. Additionally, U.S. dollar borrowings on the revolving loan can be in the form of Base Rate loans (Base Rate borrowings are based on the greater of the administrative agent’s Prime rate, an adjusted Federal Funds rate or an adjusted SOFR rate). SOFR loans bear interest at the applicable SOFR rate plus an applicable margin (varying from 2.25 % to 3.25 %). Base Rate loans bear interest at the defined Base Rate plus an applicable margin (varying from 1.25 % to 2.25 %).
The credit facility includes various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurring additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified ratios.
The leverage ratio is defined in the credit facility as the ratio of Consolidated Funded Indebtedness (as defined in the credit facility) on the last day of any trailing four quarter period to Consolidated EBITDA (as defined in the credit facility) for such period. The maximum leverage ratio permitted by our credit facility is 3.0 to 1.0; provided, however, that the Second Amendment (as defined below) provides for a temporary increase in the maximum leverage ratio under certain circumstances as described below.
The debt service coverage ratio is defined in the credit facility as the ratio of Consolidated EBITDA less the sum of capital distributions paid in cash (other than those made with respect to preferred stock issued under the Operating Agreement), Consolidated Unfunded Capital Expenditures (as defined in the credit facility), and net cash income taxes divided by the sum of cash interest expense, any dividends on the preferred stock paid in cash, and scheduled principal payments on funded indebtedness. Under our credit facility, the minimum debt service coverage ratio permitted is 1.25 to 1.0.
On June 10, 2025, the Company and certain domestic subsidiaries entered into an amendment to the credit facility (the “Second Amendment”). The Second Amendment provided for certain changes to the credit facility, including modifications to the Company’s financial covenants and applicable interest rates to assist with the possible acquisition of the remaining 40 % minority interest in Arcadia Products. Key provisions of the Second Amendment include a temporary increase in the Company’s maximum leverage ratio to 3.5 x adjusted EBITDA over the trailing 12 months — up from 3.0 x — should either the Put Option or the Call Option be exercised. This elevated leverage limit will apply for the first two quarters following payment of the purchase price of the Put Option or the Call Option, followed by a reduction to 3.25 x in the third quarter, and a return to 3.0 x thereafter.
European Line of Credit
We maintain a line of credit with a German bank with a borrowing capacity of €7,000 for our NobelClad and DynaEnergetics operations in Europe. This line of credit is also used to issue bank guarantees to customers to secure their advanced payments. As of September 30, 2026, and December 31, 2025, we had no 3,038 and €3,074 , respectively, were secured. The line of credit has open-ended terms and can be canceled by the bank at any time.
7. STOCKHOLDER PROTECTION RIGHTS AGREEMENT
On June 5, 2024, the Board adopted the Stockholder Protection Rights Agreement (the “Rights Agreement”) and declared a dividend of one right (“Right”) for each share of the Company’s common stock outstanding at the close of business on June 17, 2024. One Right will also be issued together with each share of common stock issued by the Company after that date, but before the Separation Time (as defined in the Rights Agreement). Each Right initially represents the right to purchase one one-thousandth (0.001 ) of a share of Series B Participating Preferred Stock for $75.00 , subject to adjustment and upon such terms and subject to the conditions set forth in the Rights Agreement. Rights will generally become exercisable if any person (or any persons acting as a group) acquires “Beneficial Ownership” (as defined in the Rights Agreement) of 10 %, or 20 % in the case of certain passive investors, or more of the Company’s outstanding common stock. If Rights become exercisable, all holders of Rights (other than the person, entity or group triggering the Rights Agreement, whose rights will become void and
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will not be exercisable) will have the right to purchase from the Company for $75.00 , subject to certain potential adjustments, shares of the Company’s common stock having a market value of twice that amount.
On May 30, 2025, the Company entered into Amendment No. 1 to the Rights Agreement to extend the expiration time of the Rights for one year to June 4, 2026. On April 24, 2026, the Company entered into Amendment No. 2 to the Rights Agreement to extend the expiration time of the Rights for one year to June 4, 2027 (unless the Rights are earlier redeemed, exchanged or terminated in accordance with the terms and conditions of the Rights Agreement, as amended). Except for the extension of the expiration time, the Rights Agreement remains unaltered and in full force and effect. There is currently no impact on the Company’s Condensed Consolidated Financial Statements.
The Company’s Certificate of Incorporation authorizes the issuance of preferred stock. As of September 30, 2026, no preferred stock has been issued.
8. INCOME TAXES
The effective tax rate for each of the periods reported differs from the U.S. statutory rate primarily due to variation in contribution to consolidated pre-tax income (loss) from each jurisdiction for the respective periods, differences between the U.S. and foreign tax rates (which range from 20 % to 32 %), permanent differences between book and taxable income, and income or loss attributable to the redeemable noncontrolling interest holder.
Arcadia Products is treated as a partnership for U.S. tax purposes. With the exception of certain state taxes, income or loss flows through to the shareholders and is taxed at the shareholder level. Tax impacts related to income or loss from Arcadia Products that are included in consolidated pretax results but are attributable to the redeemable noncontrolling interest holder are not included in the consolidated income tax provision.
We assess available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. Additionally, a three-year cumulative loss at a consolidated financial statement level may be viewed as negative evidence impacting a jurisdiction that by itself is not in a three-year cumulative loss position. As of September 30, 2026, we were in a three-year cumulative loss position at the consolidated financial statement level, driven by historical losses in the U.S. primarily related to the impairment of Arcadia Products’ goodwill in 2024. Accordingly, we have maintained the previously established valuation allowance against the corresponding net deferred tax assets in the U.S. as of September 30, 2026. The Company will continue to monitor the realizability of deferred tax assets and the need for valuation allowances and will record adjustments in the period in which facts support such changes.
DMC files income tax returns in the U.S. federal jurisdiction, as well as various U.S. state and foreign jurisdictions. Our tax provisions reflect our best estimate of state, local, federal and foreign taxes. In 2024, tax audits in Germany of our NobelClad and DynaEnergetics subsidiaries commenced for the years 2019 through 2021. During the third quarter of 2026, German tax authorities proposed transfer pricing adjustments that would increase local taxable income. Although the examination remains ongoing, the Company evaluated the proposed adjustments and recognized an uncertain tax position liability and a partially offsetting U.S. income tax receivable, resulting in net income tax expense of $543 for the three months ended September 30, 2026. These amounts reflect our best estimate of the amounts expected to be sustained upon resolution of this matter, including the impact of appeals we intend to pursue.
9. BUSINESS SEGMENTS
Our business is organized into three segments: Arcadia Products, DynaEnergetics and NobelClad. In December 2021, DMC acquired a 60 % controlling interest in Arcadia Products. Arcadia Products designs, engineers, fabricates, and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions to the commercial construction market. Additionally, Arcadia Products supplies customized windows and doors to the high-end residential construction market. DynaEnergetics designs, manufactures, markets, and sells perforating systems, detonators, and associated hardware primarily for the global oil and gas industry. NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas (“LNG”) processing equipment.
Our reportable segments are separately managed, strategic business units that offer different products. Each segment’s products are marketed to different customer types and require different manufacturing processes and technologies, and each segment has separate financial information available. The Chief Operating Decision Maker (“CODM”) uses segment operating income or loss to allocate resources (including employees, property, and financial or capital resources) for each segment in the
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budget and forecasting process and to assess ongoing performance on a monthly basis. The CODM does not review total assets by segment for purposes of assessing segment performance and allocating resources. As such, the disclosure of total assets by segment has not been included below. The accounting policies of our reportable segments are the same as those described in Note 2 “Significant Accounting Policies”.
Segment information is as follows for the three months ended September 30, 2026:
| Arcadia Products | DynaEnergetics | NobelClad | Total | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Stock-based compensation* | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Selling and distribution expenses | |||||||||||||||||||||||
| Amortization of purchased intangible assets | |||||||||||||||||||||||
| Restructuring expenses and asset impairments | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||||||||
| Unallocated stock-based compensation* | ( | ||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | $ | ||||||||||||||||||||||
Segment information is as follows for the nine months ended September 30, 2026:
| Arcadia Products | DynaEnergetics | NobelClad | Total | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Stock-based compensation* | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Selling and distribution expenses | |||||||||||||||||||||||
| Amortization of purchased intangible assets | |||||||||||||||||||||||
| Restructuring expenses and asset impairments | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||||||||
| Unallocated stock-based compensation* | ( | ||||||||||||||||||||||
| Other expense, net | ( | ||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | $ | ||||||||||||||||||||||
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Segment information is as follows for the three months ended September 30, 2025:
| Arcadia Products | DynaEnergetics | NobelClad | Total | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Stock-based compensation* | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Selling and distribution expenses | |||||||||||||||||||||||
| Amortization of purchased intangible assets | |||||||||||||||||||||||
| Restructuring expenses and asset impairments | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||||||||
| Unallocated stock-based compensation* | ( | ||||||||||||||||||||||
| Other expense, net | ( | ||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||
| Loss before income taxes | ( | ||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net loss | $ | ( | |||||||||||||||||||||
Segment information is as follows for the nine months ended September 30, 2025:
| Arcadia Products | DynaEnergetics | NobelClad | Total | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Stock-based compensation* | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Selling and distribution expenses | |||||||||||||||||||||||
| Amortization of purchased intangible assets | |||||||||||||||||||||||
| Restructuring expenses and asset impairments | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||||||||
| Unallocated stock-based compensation* | ( | ||||||||||||||||||||||
| Other expense, net | ( | ||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | $ | ||||||||||||||||||||||
* Stock-based compensation is not allocated to wholly owned segments DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia Products segment as 60 40
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| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||||||||
| Arcadia Products | $ | $ | $ | $ | |||||||||||||||||||
| DynaEnergetics | |||||||||||||||||||||||
| NobelClad | |||||||||||||||||||||||
| Segment depreciation and amortization | |||||||||||||||||||||||
| Corporate and other | |||||||||||||||||||||||
| Consolidated depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
The disaggregation of revenue earned from contracts with customers is based on the geographic location of the customer. For Arcadia Products, net sales have been presented consistent with United States regional definitions as provided by the American Institute of Architects. For DynaEnergetics and NobelClad, all net sales are from products shipped from our manufacturing facilities and distribution centers located in the United States, Germany, and Canada. The following represents our net sales based on the geographic location of the customer for the periods presented:
Arcadia Products
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||||||||
| South | |||||||||||||||||||||||
| Northeast | |||||||||||||||||||||||
| Midwest | |||||||||||||||||||||||
| Total Arcadia Products | $ | $ | $ | $ | |||||||||||||||||||
DynaEnergetics
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| India | |||||||||||||||||||||||
| Canada | |||||||||||||||||||||||
| Kuwait | |||||||||||||||||||||||
| Egypt | |||||||||||||||||||||||
| Algeria | |||||||||||||||||||||||
| Oman | |||||||||||||||||||||||
| Ukraine | |||||||||||||||||||||||
| United Arab Emirates | |||||||||||||||||||||||
| Turkey | |||||||||||||||||||||||
| Turkmenistan | |||||||||||||||||||||||
Rest of the world (1) | |||||||||||||||||||||||
| Total DynaEnergetics | $ | $ | $ | $ | |||||||||||||||||||
(1) Rest of the world does not include any individual country comprising sales greater than 2% of total DynaEnergetics revenue.
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NobelClad
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| China | |||||||||||||||||||||||
| India | |||||||||||||||||||||||
| Spain | |||||||||||||||||||||||
| Italy | |||||||||||||||||||||||
| United Arab Emirates | |||||||||||||||||||||||
| Canada | |||||||||||||||||||||||
| Germany | |||||||||||||||||||||||
| Sweden | |||||||||||||||||||||||
| France | |||||||||||||||||||||||
| Belgium | |||||||||||||||||||||||
| Netherlands | |||||||||||||||||||||||
| South Korea | |||||||||||||||||||||||
| Bahrain | |||||||||||||||||||||||
| Saudi Arabia | |||||||||||||||||||||||
Rest of the world (1) | |||||||||||||||||||||||
| Total NobelClad | $ | $ | $ | $ | |||||||||||||||||||
(1) Rest of the world does not include any individual country comprising sales greater than 3% of total NobelClad revenue.
During the three and nine months ended September 30, 2026, one DynaEnergetics customer accounted for approximately 20 % and 21 %, respectively, of consolidated net sales. During the three and nine months ended September 30, 2025, the same DynaEnergetics customer accounted for approximately 26 % and 25 %, respectively, of consolidated net sales. Additionally, the same DynaEnergetics customer accounted for approximately 26 % and 32 % of consolidated accounts receivable as of September 30, 2026, and December 31, 2025, respectively.
10. DERIVATIVE INSTRUMENTS
We are exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the U.S. dollar to the euro, the U.S. dollar to the Canadian dollar and, to a lesser extent, other currencies, arising from intercompany and third-party transactions entered into by our subsidiaries that are denominated in currencies other than their functional currency. Changes in exchange rates with respect to these transactions result in unrealized gains or losses if such transactions are unsettled at the end of the reporting period or realized gains or losses at settlement of the transaction. We use foreign currency forward contracts to offset foreign exchange rate fluctuations on foreign currency denominated asset and liability positions. None of these contracts are designated as accounting hedges, and all changes in the fair value of forward contracts are recognized in “Other income (expense), net” within our Condensed Consolidated Statements of Operations.
We execute derivatives with a specialized foreign exchange brokerage firm as well as other large financial institutions. The primary credit risk inherent in derivative agreements is the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. We perform a review of the credit risk of our counterparties at the inception of the contract and on an ongoing basis. We anticipate that our counterparties will be able to fully satisfy their obligations under the agreement but will take action if doubt arises regarding the counterparties’ ability to perform.
As of September 30, 2026, and December 31, 2025, the net notional amounts of forward contracts the Company held were $15,383 and $10,858 , respectively. At September 30, 2026, and December 31, 2025, the fair value of outstanding forward contracts was $0
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The following table reflects the location and amount of net (losses) gains from our foreign currency contracts for the periods presented. These net (losses) gains offset foreign currency gains and losses recorded in the normal course of business, which are not shown below.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Derivative | Statements of Operations Location | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||
| Foreign currency contracts | Other income (expense), net | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||
11. COMMITMENTS AND CONTINGENCIES
Contingent Liabilities
The Company records an accrual for contingent liabilities when a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued.
Legal Proceedings
In the ordinary course of its business, the Company is involved in a number of lawsuits and claims, both actual and potential. In addition to the matters discussed below, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, safety and health, commercial, tax, product liability, intellectual property infringement and employment matters, and other actions and claims arising out of the normal course of business. Although it is difficult to accurately predict the outcome of any such proceedings, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company.
Stormwater Regulatory Matter
In 2024, the Company entered into a Consent Decree with Los Angeles Waterkeeper (“Waterkeeper”) to settle a citizen suit alleging stormwater-related violations of the Clean Water Act at three Arcadia Products facilities located in Vernon, California. The Consent Decree requires the Company to undertake certain improvements to its stormwater management infrastructure and practices at all three facilities over the next several years.
The Company also has been in contact with the Los Angeles Regional Water Quality Control Board to address certain alleged violations of stormwater regulatory requirements that may be subject to mandatory minimum penalties under applicable California law. As of September 30, 2026, the Company has accrued $354 in aggregate to address potential claims.
Other Matters
The Company has been notified by a customer of a potential performance issue involving one of NobelClad’s products. As of the date of this report, no legal claim has been asserted, and no legal proceeding has commenced. We are currently evaluating the matter. The Company has determined that a loss related to this matter is reasonably possible; however, we are unable at this time to reasonably estimate the amount or range of any potential loss. Accordingly, no liability has been recorded in the Condensed Consolidated Financial Statements.
Factors that will impact the amount of loss in this matter, if any, include the results of testing, the scope and cost of any product replacement or remediation, the allocation of responsibility among the customer, the Company, and any relevant third-parties, and the extent of available insurance coverage and recoveries.
U.S. Tariffs
On February 20, 2026, the United States Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”). On March 5, 2026, the U.S. Court of International Trade issued an additional ruling stating that importers that have paid tariffs under IEEPA are due refunds. On April 20, 2026, the U.S. Customs and Border Protection released the Consolidated Administration and Processing Entries functionality to facilitate a phased approach to process IEEPA tariff refunds.
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During the three and nine months ended September 30, 2026, the Company recognized $5,425 and $6,913 , respectively, of benefit within costs of products sold related to refunds of tariffs previously paid by DynaEnergetics. The refunds recognized relate to specific claims for which the Company concluded realization was probable and the amount could be reasonably estimated. The Company continues to pursue additional tariff refunds associated with IEEPA-related duties previously paid. As of September 30, 2026, the Company has not recognized any amounts related to these additional potential recoveries because the realization and timing of such refunds remain uncertain.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our historical Consolidated Financial Statements and notes that are included in our Annual Report filed on Form 10-K for the year ended December 31, 2025.
Unless stated otherwise, all dollar figures are presented in thousands (000s).
Overview
General
DMC Global Inc. (“DMC”, “we”, “us”, “our”, or the “Company”) operates three manufacturing businesses: Arcadia Products, DynaEnergetics and NobelClad, which produce differentiated products and engineered solutions primarily for the construction, energy, and industrial processing markets. Our businesses seek to capitalize on their product and service differentiation to expand profit margins, increase cash flow and enhance shareholder value. Based in Broomfield, Colorado, DMC’s common stock trades on Nasdaq under the symbol “BOOM.”
Arcadia Products
On December 23, 2021, DMC completed the acquisition of 60% of the membership interests in Arcadia Products, LLC, a Colorado limited liability company resulting from the conversion of Arcadia, Inc. (collectively, “Arcadia Products”). Arcadia Products designs, engineers, fabricates, and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions to the commercial construction market. Additionally, Arcadia Products supplies customized windows and doors to the high-end residential construction market.
Cost of products sold for Arcadia Products includes the cost of aluminum, paint, and other raw materials used in manufacturing as well as employee compensation and benefits, manufacturing facility lease expense, depreciation of manufacturing equipment, supplies and other manufacturing overhead expenses.
DynaEnergetics
DynaEnergetics designs, manufactures, markets, and sells perforating systems, detonators, and associated hardware primarily for the global oil and gas industry. These products are primarily sold to oilfield service companies in the U.S., Europe, Canada, Africa, the Middle East, and Asia. The market for perforating products, which are used during the well completion process, generally corresponds with oil and gas exploration and production activity. Well completion operations are increasingly complex, which in turn has increased the demand for intrinsically-safe, reliable and technically advanced perforating systems.
Cost of products sold for DynaEnergetics includes the cost of metals, explosives and other raw materials used to manufacture shaped charges, detonating products and perforating guns as well as employee compensation and benefits, manufacturing facility lease expense, depreciation of manufacturing facilities and equipment, supplies and other manufacturing overhead expenses.
NobelClad
NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion-resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and LNG processing equipment. While most demand for our products is driven by maintenance and retrofit projects at existing plants and facilities, new projects for petrochemical processing, oil refining, and aluminum smelting facilities also account for a significant portion of total demand. These industries tend to be cyclical in nature, and the timing of new order inflow remains difficult to predict.
Cost of products sold for NobelClad includes the cost of metals, explosive powders and other raw materials used to manufacture clad metal plates and transition joints as well as employee compensation and benefits, outside processing costs, manufacturing facility lease expense, depreciation of manufacturing facilities and equipment, supplies and other manufacturing overhead expenses.
Factors Affecting Results
•Consolidated net sales were $172,825 in the third quarter of 2026 versus $151,532 in the third quarter of 2025, an increase of 14%. The increase was attributable to higher sales at Arcadia Products and NobelClad, partially offset by lower sales at DynaEnergetics, as described below.
•Arcadia Products reported net sales of $76,886 in the third quarter of 2026, representing an increase of 25% compared with the third quarter of 2025. The increase was primarily attributable to higher sales volumes across all product lines.
•DynaEnergetics reported net sales of $67,124 in the third quarter of 2026, representing a decrease of 3% compared with the third quarter of 2025. The decrease was primarily attributable to lower sales volumes in our North American market which reduced net sales by $2,828. This decrease was partially offset by an increase in international sales of $1,006 due to project timing.
•NobelClad reported net sales of $28,815 in the third quarter of 2026, representing an increase of 38% compared with the third quarter of 2025 driven principally by shipments associated with a large international petrochemical project.
•The Company’s leverage ratio, calculated in accordance with its credit facility, was 1.41x as of September 30, 2026 in comparison to the maximum ratio permitted of 3.0x. The Company’s adjusted leverage ratio, calculated using net debt, a non-GAAP measure, was 0.39x as of September 30, 2026.
Refer to “Consolidated Results of Operations” and “Business Segment Financial Information” below for additional discussion.
Outlook
Despite the improved profitability of our three manufacturing businesses, each continues to be impacted by macroeconomic and geopolitical developments, including the conflict in the Middle East, volatility in global oil and gas markets, elevated interest rates, and changes in global tariff policies. DynaEnergetics and NobelClad, which serve the upstream and downstream oil and gas markets, respectively, remain exposed to fluctuations in crude oil prices. If we or our customers are unable to offset the effects of these conditions, our net sales and profitability may be adversely affected.
Arcadia Products continues to work to mitigate the effects of elevated interest rates, volatile input costs, and generally lower construction activity in its core regional markets. During the third quarter of 2026, Arcadia Products continued to focus on improving product availability and lead times across its network of regional service centers, and accelerated sales in its core, short-cycle commercial product line. Sales of Arcadia Products’ high-end residential windows and doors also improved, reflecting successful efforts to right-size the product offering and refocus on its target markets.
DynaEnergetics is continuing a series of initiatives designed to reduce costs and increase market share. While demand remains steady across its North American and international markets, DynaEnergetics has expanded its sales and marketing efforts in certain emerging global shale markets. Additionally, DynaEnergetics is pursuing growth opportunities in the defense and Enhanced Geothermal Systems industries.
NobelClad uses backlog, defined as all unfilled firm purchase orders and commitments at a point in time, to assess near-term demand. Most firm purchase orders and commitments are realized and shipped within 12 months. Order backlog increased to $72,361 at the end of the third quarter of 2026, compared with $63,508 at the end of the second quarter of 2026, with increases attributable to large project orders in the energy, engineered wood and defense sectors. Shipments from NobelClad’s order backlog accelerated during the third quarter and are expected to remain above historic levels during the fourth quarter. NobelClad continues to pursue additional opportunities with the U.S. Navy following its recently announced plans to accelerate its naval readiness program.
Although each of our businesses continue to be affected by challenging end-market conditions, we are beginning to benefit from specific improvement initiatives. However, we will continue to evaluate additional mitigation strategies and targeted cost-reduction programs if business conditions deteriorate.
Use of Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also discloses certain non-GAAP financial measures that we use in operational and financial decision making. Non-GAAP financial measures include the following:
•EBITDA: defined as net income (loss) plus net interest, taxes, depreciation and amortization.
•Adjusted EBITDA: excludes from EBITDA stock-based compensation, restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC’s operating performance (as further described in the tables below).
•Adjusted EBITDA attributable to DMC Global Inc.: excludes the Adjusted EBITDA attributable to the 40% redeemable noncontrolling interest in Arcadia Products.
•Adjusted EBITDA for DMC business segments: defined as operating income (loss) plus depreciation, amortization, allocated stock-based compensation (if applicable), restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC's operating performance.
•Adjusted net income (loss): defined as net income (loss) attributable to DMC Global Inc. stockholders prior to the adjustment of redeemable noncontrolling interest plus restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC's operating performance.
•Adjusted diluted earnings per share: defined as diluted earnings per share attributable to DMC Global Inc. stockholders (exclusive of adjustment of redeemable noncontrolling interest) plus restructuring expenses and asset impairment charges (if applicable) and, when appropriate, nonrecurring items that management does not utilize in assessing DMC’s operating performance.
•Net debt: defined as total debt less consolidated cash and cash equivalents per the Condensed Consolidated Balance Sheets.
Management believes providing these additional financial measures is useful to investors in understanding the Company’s operating performance, excluding the effects of restructuring, asset impairment, and other nonrecurring charges, as well as its liquidity. Management typically monitors the business utilizing the above non-GAAP measures, in addition to GAAP results, to understand and compare operating results across accounting periods, and certain management incentive awards are based, in part, on these measures. The presence of non-GAAP financial measures in this report is not intended to suggest that such measures be considered in isolation or as a substitute for, or as superior to, DMC’s GAAP information, and investors are cautioned that the non-GAAP financial measures are limited in their usefulness. Given that not all companies use identical calculations, DMC’s presentation of non-GAAP financial measures may not be comparable to similarly titled measures of other companies.
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Consolidated Results of Operations
Three months ended September 30, 2026 compared with three months ended September 30, 2025
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 172,825 | $ | 151,532 | $ | 21,293 | 14 | % | ||||||||||||||||||
| Gross profit | 46,446 | 32,829 | 13,617 | 41 | % | |||||||||||||||||||||
| Gross profit percentage | 26.9 | % | 21.7 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 16,516 | 15,282 | 1,234 | 8 | % | |||||||||||||||||||||
| % of net sales | 9.6 | % | 10.1 | % | ||||||||||||||||||||||
| Selling and distribution expenses | 10,976 | 10,668 | 308 | 3 | % | |||||||||||||||||||||
| % of net sales | 6.4 | % | 7.0 | % | ||||||||||||||||||||||
| Amortization of purchased intangible assets | 4,356 | 4,764 | (408) | (9 | %) | |||||||||||||||||||||
| % of net sales | 2.5 | % | 3.1 | % | ||||||||||||||||||||||
| Strategic review and related expenses | — | 303 | (303) | (100 | %) | |||||||||||||||||||||
| Restructuring expenses and asset impairments | 94 | 1,202 | (1,108) | (92 | %) | |||||||||||||||||||||
| Operating income | 14,504 | 610 | 13,894 | 2,278 | % | |||||||||||||||||||||
| Other income (expense), net | 18 | (334) | 352 | 105 | % | |||||||||||||||||||||
| Interest expense, net | (1,256) | (1,632) | (376) | (23 | %) | |||||||||||||||||||||
| Income (loss) before income taxes | 13,266 | (1,356) | 14,622 | 1,078 | % | |||||||||||||||||||||
| Income tax provision | 1,195 | 714 | 481 | 67 | % | |||||||||||||||||||||
| Net income (loss) | 12,071 | (2,070) | 14,141 | 683 | % | |||||||||||||||||||||
| Less: Net income attributable to redeemable noncontrolling interest | 2,363 | 1,011 | 1,352 | 134 | % | |||||||||||||||||||||
| Net income (loss) attributable to DMC Global Inc. | 9,708 | (3,081) | 12,789 | 415 | % | |||||||||||||||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 19,014 | $ | 8,564 | $ | 10,450 | 122 | % | ||||||||||||||||||
Net sales were $172,825 for the three months ended September 30, 2026, an increase of 14% compared with the same period in 2025. Arcadia Products’ net sales increased 25% primarily as a result of higher sales volumes across all product lines. NobelClad’s net sales increased 38% driven principally by shipments associated with a large international petrochemical project. DynaEnergetics’ net sales declined 3% due to lower sales volumes in its core North American market, partially offset by higher international sales due to project timing.
Gross profit percentage was 26.9% compared with 21.7% for the same period in 2025. The increase was primarily attributable to DynaEnergetics due to refunds recognized for tariffs previously paid of $5,425, as well as the impact of cost savings initiatives and an improved sales mix.
General and administrative expenses increased $1,234 for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to higher incentive compensation costs.
Selling and distribution expenses increased $308 for the three months ended September 30, 2026, compared with the same period in 2025, primarily driven by higher selling costs at all three business segments.
Amortization of purchased intangible assets decreased $408 for the three months ended September 30, 2026, compared to the same period in 2025, as the Arcadia Products customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Strategic review and related expenses of $303 for the three months ended September 30, 2025 primarily included professional service fees.
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Restructuring expenses and asset impairments of $94 for the three months ended September 30, 2026 primarily related to employee severance associated with headcount reductions at Arcadia Products and DynaEnergetics.
Restructuring expenses and asset impairments of $1,202 for the three months ended September 30, 2025 included $1,013 in contract termination costs associated with exiting a lease at NobelClad and $189 of employee severance associated with headcount reductions, primarily at Arcadia Products.
Operating income was $14,504 for the three months ended September 30, 2026, compared to operating income of $610 in the same period in 2025, due to higher net sales at Arcadia Products and NobelClad and higher gross profit at all three business segments, including refunds recognized for tariffs previously paid of $5,425 at DynaEnergetics.
Other income, net of $18 for the three months ended September 30, 2026 primarily related to net realized foreign currency exchange gains. Currency gains and losses can arise when subsidiaries enter into intercompany and third-party transactions that are denominated in currencies other than their functional currency, including foreign currency forward contracts used to offset foreign exchange rate fluctuations on certain foreign currency denominated asset and liability positions.
Income tax provision of $1,195 was recorded on income before income taxes of $13,266 for the three months ended September 30, 2026, compared with an income tax provision of $714 on a loss before income taxes of $1,356 for the three months ended September 30, 2025. Our most significant operations are in the United States and Germany, which have statutory income tax rates of 21% and 32% (combined), respectively. The mix of income or loss before income taxes between these jurisdictions is a primary driver of the difference between our 21% statutory tax rate and our effective tax rate. State taxes and a U.S. valuation allowance, which results in no tax benefit for losses generated domestically, also unfavorably impact our effective tax rate. For the three months ended September 30, 2026, the effective tax rate was further unfavorably affected by the recognition of an uncertain tax position liability related to an ongoing tax audit in Germany. These unfavorable impacts were partially offset by the operating results of Arcadia Products that are attributable to the redeemable noncontrolling interest holder, which are not taxed at DMC.
Net income attributable to DMC Global Inc. for the three months ended September 30, 2026 was $9,708, compared with net loss attributable to DMC Global Inc. of $3,081 for the same period in 2025, primarily due to the factors discussed above.
Adjusted EBITDA increased for the three months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income (loss) | $ | 12,071 | $ | (2,070) | |||||||
| Interest expense, net | 1,256 | 1,632 | |||||||||
| Income tax provision | 1,195 | 714 | |||||||||
| Depreciation | 3,633 | 3,733 | |||||||||
| Amortization of purchased intangible assets | 4,356 | 4,764 | |||||||||
| EBITDA | 22,511 | 8,773 | |||||||||
| Stock-based compensation | 941 | 1,360 | |||||||||
| Strategic review and related expenses | — | 303 | |||||||||
| Restructuring expenses and asset impairments | 94 | 1,202 | |||||||||
| Other (income) expense, net | (18) | 334 | |||||||||
| Adjusted EBITDA | 23,528 | 11,972 | |||||||||
| Less: adjusted EBITDA attributable to redeemable noncontrolling interest | (4,514) | (3,408) | |||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 19,014 | $ | 8,564 | |||||||
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Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share increased for the three months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share.
| Three months ended September 30, 2026 | |||||||||||||||||||||||||||||
| Amount | Per Share (1) | ||||||||||||||||||||||||||||
Net income attributable to DMC Global Inc. (2) | $ | 9,708 | $ | 0.48 | |||||||||||||||||||||||||
| Restructuring expenses and asset impairments, net of tax | 75 | — | |||||||||||||||||||||||||||
| As adjusted | $ | 9,783 | $ | 0.48 | |||||||||||||||||||||||||
(1) Calculated using diluted weighted average shares outstanding of 20,315,635.
(2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest.
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||
| Amount | Per Share (1) | ||||||||||||||||||||||||||||
Net loss attributable to DMC Global Inc. (2) | $ | (3,081) | $ | (0.16) | |||||||||||||||||||||||||
| Strategic review and related expenses, net of tax | 303 | 0.02 | |||||||||||||||||||||||||||
| Restructuring expenses and asset impairments, net of tax | 1,149 | 0.06 | |||||||||||||||||||||||||||
| As adjusted | $ | (1,629) | $ | (0.08) | |||||||||||||||||||||||||
(1) Calculated using diluted weighted average shares outstanding of 19,930,699.
(2) Net loss attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest.
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Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
| Nine months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 465,373 | $ | 466,309 | $ | (936) | — | % | ||||||||||||||||||
| Gross profit | 106,244 | 110,759 | (4,515) | (4 | %) | |||||||||||||||||||||
| Gross profit percentage | 22.8 | % | 23.8 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 44,564 | 47,861 | (3,297) | (7 | %) | |||||||||||||||||||||
| % of net sales | 9.6 | % | 10.3 | % | ||||||||||||||||||||||
| Selling and distribution expenses | 32,073 | 32,536 | (463) | (1 | %) | |||||||||||||||||||||
| % of net sales | 6.9 | % | 7.0 | % | ||||||||||||||||||||||
| Amortization of purchased intangible assets | 13,069 | 14,290 | (1,221) | (9 | %) | |||||||||||||||||||||
| % of net sales | 2.8 | % | 3.1 | % | ||||||||||||||||||||||
| Strategic review and related expenses | — | 2,376 | (2,376) | (100 | %) | |||||||||||||||||||||
| Restructuring expenses and asset impairments | 899 | 2,676 | (1,777) | (66 | %) | |||||||||||||||||||||
| Operating income | 15,639 | 11,020 | 4,619 | 42 | % | |||||||||||||||||||||
| Other expense, net | (12) | (898) | (886) | (99 | %) | |||||||||||||||||||||
| Interest expense, net | (3,997) | (5,142) | (1,145) | (22 | %) | |||||||||||||||||||||
| Income before income taxes | 11,630 | 4,980 | 6,650 | 134 | % | |||||||||||||||||||||
| Income tax provision | 4,352 | 4,866 | (514) | (11 | %) | |||||||||||||||||||||
| Net income | 7,278 | 114 | 7,164 | 6,284 | % | |||||||||||||||||||||
| Net income attributable to redeemable noncontrolling interest | 3,128 | 2,402 | 726 | 30 | % | |||||||||||||||||||||
| Net income (loss) attributable to DMC Global Inc. | 4,150 | (2,288) | 6,438 | 281 | % | |||||||||||||||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 33,583 | $ | 36,493 | $ | (2,910) | (8 | %) | ||||||||||||||||||
Gross profit percentage was 22.8% compared with 23.8% for the same period in 2025. The decrease compared to the prior year was primarily attributable to NobelClad’s decline in sales which also included a less favorable project mix and lower absorption of fixed manufacturing overhead costs. The decrease in gross profit was also impacted by inflation in base aluminum metal costs at Arcadia Products which exceeded corresponding increases in customer pricing.
General and administrative expenses decreased $3,297 for the nine months ended September 30, 2026, compared with the same period in 2025, primarily attributable to lower outside services costs of $1,117, the prior year recognition of a remediation liability at a former NobelClad European cladding site of $696, lower rent expense at DynaEnergetics of $363, a decrease in business-related travel of $251, and lower depreciation expense of $194.
Amortization of purchased intangible assets decreased $1,221 for the nine months ended September 30, 2026, compared to the same period in 2025, as the Arcadia Products customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Strategic review and related expenses of $2,376 for the nine months ended September 30, 2025 primarily related to $1,786 in professional service fees and $366 in employee retention compensation, including $36 of stock-based compensation.
Restructuring expenses and asset impairments of $899 for the nine months ended September 30, 2026 related to employee severance associated with headcount reductions at Arcadia Products, DynaEnergetics, and Corporate.
For the nine months ended September 30, 2025, restructuring expenses and asset impairments of $2,676 included contract termination costs associated with exiting a lease at NobelClad of $1,013, an asset impairment charge and related contract termination costs associated with exiting a lease at DynaEnergetics of $605, and employee severance associated with headcount reductions across all three business segments of $1,058.
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Operating income was $15,639 for the nine months ended September 30, 2026, compared with operating income of $11,020 in the same period in 2025, primarily due to lower general and administrative expenses as well as the absence of strategic review and related expenses.
Other expense, net of $12 for the nine months ended September 30, 2026 primarily related to net realized foreign currency exchange losses. Currency gains and losses can arise when subsidiaries enter into intercompany and third-party transactions that are denominated in currencies other than their functional currency, including foreign currency forward contracts used to offset foreign exchange rate fluctuations on certain foreign currency denominated asset and liability positions.
Income tax provision of $4,352 was recorded on income before income taxes of $11,630 for the nine months ended September 30, 2026, compared with an income tax provision of $4,866 on income before income taxes of $4,980 for the nine months ended September 30, 2025. Our most significant operations are in the United States and Germany, which have statutory income tax rates of 21% and 32% (combined), respectively. The mix of income or loss before income taxes between these jurisdictions is a primary driver of the difference between our 21% statutory tax rate and our effective tax rate. State taxes and a U.S. valuation allowance, which results in no tax benefit for losses generated domestically, also unfavorably impact our effective tax rate. These unfavorable impacts were partially offset by the operating results of Arcadia Products that are attributable to the redeemable noncontrolling interest holder, which are not taxed at DMC.
Net income attributable to DMC Global Inc. for the nine months ended September 30, 2026 was $4,150, compared to net loss attributable to DMC Global Inc. of $2,288 for the same period in 2025, primarily due to the factors discussed above.
Adjusted EBITDA decreased for the nine months ended September 30, 2026, compared with the same period in 2025, primarily due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Nine months ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net income | $ | 7,278 | $ | 114 | ||||||||||
| Interest expense, net | 3,997 | 5,142 | ||||||||||||
| Income tax provision | 4,352 | 4,866 | ||||||||||||
| Depreciation | 10,936 | 11,100 | ||||||||||||
| Amortization of purchased intangible assets | 13,069 | 14,290 | ||||||||||||
| EBITDA | 39,632 | 35,512 | ||||||||||||
| Stock-based compensation | 2,774 | 4,340 | ||||||||||||
| Strategic review and related expenses | — | 2,376 | ||||||||||||
| Restructuring expenses and asset impairments | 899 | 2,676 | ||||||||||||
Executive transition costs | — | 520 | ||||||||||||
| Other expense, net | 12 | 898 | ||||||||||||
| Adjusted EBITDA | 43,317 | 46,322 | ||||||||||||
| Less: adjusted EBITDA attributable to redeemable noncontrolling interest | (9,734) | (9,829) | ||||||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 33,583 | $ | 36,493 | ||||||||||
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Adjusted Net Income and Adjusted Diluted Earnings Per Share increased for the nine months ended September 30, 2026, compared with the same period in 2025, primarily due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net Income and Adjusted Diluted Earnings Per Share.
| Nine months ended September 30, 2026 | ||||||||||||||
| Amount | Per Share (1) | |||||||||||||
Net income attributable to DMC Global Inc. (2) | $ | 4,150 | $ | 0.21 | ||||||||||
| Restructuring expenses and asset impairments, net of tax | 663 | 0.03 | ||||||||||||
| As adjusted | $ | 4,813 | $ | 0.24 | ||||||||||
(1) Calculated using diluted weighted average shares outstanding of 20,223,991.
(2) Net income attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest.
| Nine months ended September 30, 2025 | ||||||||||||||
| Amount | Per Share (1) | |||||||||||||
Net (loss) income attributable to DMC Global Inc. (2) | $ | (2,288) | $ | (0.12) | ||||||||||
| Strategic review and related expenses, net of tax | 2,376 | 0.12 | ||||||||||||
| Restructuring expenses and asset impairments, net of tax | 2,406 | 0.12 | ||||||||||||
| Executive transition costs, net of tax | 520 | 0.03 | ||||||||||||
| As adjusted | $ | 3,014 | $ | 0.15 | ||||||||||
(1) Calculated using diluted weighted average shares outstanding of 19,883,652.
(2) Net loss attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest.
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Business Segment Financial Information
We primarily evaluate performance and allocate resources based on segment revenues, operating income (loss) and Adjusted EBITDA as well as projected future performance. Segment operating income (loss) is defined as revenues less expenses identifiable to the segment. DMC consolidated operating income (loss) and Adjusted EBITDA include unallocated corporate expenses and unallocated stock-based compensation expense. Stock-based compensation is not allocated to wholly owned segments, DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia Products segment as 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. Segment operating income (loss) will reconcile to consolidated income (loss) before income taxes by deducting unallocated corporate expenses, unallocated stock-based compensation, other income (expense), net, and interest expense, net.
Arcadia Products
Three months ended September 30, 2026 compared with three months ended September 30, 2025
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 76,886 | $ | 61,661 | $ | 15,225 | 25 | % | ||||||||||||||||||
| Gross profit | 21,994 | 17,717 | 4,277 | 24 | % | |||||||||||||||||||||
| Gross profit percentage | 28.6 | % | 28.7 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 7,146 | 5,998 | 1,148 | 19 | % | |||||||||||||||||||||
| Selling and distribution expenses | 4,665 | 4,238 | 427 | 10 | % | |||||||||||||||||||||
| Amortization of purchased intangible assets | 4,356 | 4,764 | (408) | (9 | %) | |||||||||||||||||||||
| Restructuring expenses and asset impairments | 47 | 132 | (85) | (64 | %) | |||||||||||||||||||||
| Operating income | 5,780 | 2,585 | 3,195 | 124 | % | |||||||||||||||||||||
| Adjusted EBITDA | 11,284 | 8,519 | 2,765 | 32 | % | |||||||||||||||||||||
| Less: adjusted EBITDA attributable to redeemable noncontrolling interest | (4,514) | (3,408) | 1,106 | 32 | % | |||||||||||||||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 6,770 | $ | 5,111 | $ | 1,659 | 32 | % | ||||||||||||||||||
Net sales increased $15,225 for the three months ended September 30, 2026, compared with the same period in 2025, primarily attributable to higher sales volumes in short-cycle commercial exterior, commercial interior, and high-end residential markets.
General and administrative expenses increased $1,148 for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to higher incentive compensation costs.
Selling and distribution expenses increased $427 for the three months ended September 30, 2026, compared with the same period in 2025, primarily driven by higher incentive compensation costs.
Amortization of purchased intangible assets decreased $408 for the three months ended September 30, 2026, compared with the same period in 2025, as the customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Restructuring expenses and asset impairments of $47 and $132 for the three months ended September 30, 2026, and 2025, respectively, related to employee severance associated with headcount reductions.
Operating income was $5,780 for the three months ended September 30, 2026, compared to operating income of $2,585 in the same period in 2025, primarily due to higher net sales and corresponding gross profit.
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Adjusted EBITDA increased for the three months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating income | $ | 5,780 | $ | 2,585 | |||||||
| Adjustments: | |||||||||||
| Depreciation | 1,022 | 1,020 | |||||||||
| Amortization of purchased intangible assets | 4,356 | 4,764 | |||||||||
| Stock-based compensation | 79 | 18 | |||||||||
| Restructuring expenses and asset impairments | 47 | 132 | |||||||||
| Adjusted EBITDA | 11,284 | 8,519 | |||||||||
| Less: adjusted EBITDA attributable to redeemable noncontrolling interest | (4,514) | (3,408) | |||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 6,770 | $ | 5,111 | |||||||
Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
| Nine months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 201,011 | $ | 189,221 | $ | 11,790 | 6 | % | ||||||||||||||||||
| Gross profit | 54,323 | 54,328 | (5) | — | % | |||||||||||||||||||||
| Gross profit percentage | 27.0 | % | 28.7 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 19,782 | 19,947 | (165) | (1 | %) | |||||||||||||||||||||
| Selling and distribution expenses | 13,460 | 13,345 | 115 | 1 | % | |||||||||||||||||||||
| Amortization of purchased intangible assets | 13,069 | 14,290 | (1,221) | (9 | %) | |||||||||||||||||||||
| Restructuring expenses and asset impairments | 589 | 649 | (60) | (9 | %) | |||||||||||||||||||||
| Operating income | 7,423 | 6,097 | 1,326 | 22 | % | |||||||||||||||||||||
| Adjusted EBITDA | 24,336 | 24,571 | (235) | (1 | %) | |||||||||||||||||||||
| Less: adjusted EBITDA attributable to redeemable noncontrolling interest | (9,734) | (9,829) | (95) | (1 | %) | |||||||||||||||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 14,602 | $ | 14,742 | $ | (140) | (1 | %) | ||||||||||||||||||
Net sales increased $11,790 for the nine months ended September 30, 2026, compared with the same period in 2025, primarily due to higher sales volumes in short-cycle commercial exterior, commercial interior, and high-end residential markets as well as higher customer pricing in response to increases in raw material input costs.
Gross profit percentage decreased to 27.0% for the nine months ended September 30, 2026 primarily due to inflation in base aluminum metal costs which exceeded corresponding increases in customer pricing.
Amortization of purchased intangible assets decreased $1,221 for the nine months ended September 30, 2026, compared with the same period in 2025, as the customer relationship purchased intangible asset is amortized using an accelerated amortization method.
Restructuring expenses and asset impairments of $589 and $649 for the nine months ended September 30, 2026, and 2025, respectively, related to employee severance associated with headcount reductions.
Operating income was $7,423 for the nine months ended September 30, 2026, compared to operating income of $6,097 in the same period in 2025, primarily due to lower amortization expense.
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Adjusted EBITDA decreased for the nine months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating income | $ | 7,423 | $ | 6,097 | |||||||
| Adjustments: | |||||||||||
| Depreciation | 3,074 | 3,042 | |||||||||
| Amortization of purchased intangible assets | 13,069 | 14,290 | |||||||||
| Stock-based compensation | 181 | 493 | |||||||||
| Restructuring expenses and asset impairments | 589 | 649 | |||||||||
| Adjusted EBITDA | 24,336 | 24,571 | |||||||||
| Less: adjusted EBITDA attributable to redeemable noncontrolling interest | (9,734) | (9,829) | |||||||||
| Adjusted EBITDA attributable to DMC Global Inc. | $ | 14,602 | $ | 14,742 | |||||||
DynaEnergetics
Three months ended September 30, 2026 compared with three months ended September 30, 2025
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 67,124 | $ | 68,946 | $ | (1,822) | (3 | %) | ||||||||||||||||||
| Gross profit | 17,544 | 9,976 | 7,568 | 76 | % | |||||||||||||||||||||
| Gross profit percentage | 26.1 | % | 14.5 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 3,076 | 2,416 | 660 | 27 | % | |||||||||||||||||||||
| Selling and distribution expenses | 4,233 | 4,514 | (281) | (6 | %) | |||||||||||||||||||||
| Restructuring expenses and asset impairments | 31 | 57 | (26) | (46 | %) | |||||||||||||||||||||
| Operating income | 10,204 | 2,989 | 7,215 | 241 | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | 11,928 | $ | 4,867 | $ | 7,061 | 145 | % | ||||||||||||||||||
Net sales decreased $1,822 for the three months ended September 30, 2026, compared with the same period in 2025, primarily as a result of lower sales volumes in DynaEnergetics’ core North American market which reduced net sales by $2,828. This decrease was partially offset by an increase in net sales in DynaEnergetics’ international market of $1,006 due to project timing.
Gross profit percentage increased to 26.1% for the three months ended September 30, 2026 primarily due to refunds recognized for tariffs previously paid of $5,425, as well as the impact of cost savings initiatives and an improved sales mix.
General and administrative expenses increased $660 for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to higher incentive compensation costs.
Selling and distribution expenses decreased $281 for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to lower bad debt expense of $525, partially offset by higher selling costs of $292.
Restructuring expenses and asset impairments of $31 and $57 for the three months ended September 30, 2026, and 2025, respectively, related to employee severance associated with headcount reductions.
Operating income was $10,204 for the three months ended September 30, 2026, compared to operating income of $2,989 in the same period in 2025, primarily due to higher gross profit.
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Adjusted EBITDA increased for the three months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating income | $ | 10,204 | $ | 2,989 | |||||||
| Adjustments: | |||||||||||
| Depreciation | 1,693 | 1,821 | |||||||||
| Restructuring expenses and asset impairments | 31 | 57 | |||||||||
| Adjusted EBITDA | $ | 11,928 | $ | 4,867 | |||||||
Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
| Nine months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 194,054 | $ | 201,359 | $ | (7,305) | (4 | %) | ||||||||||||||||||
| Gross profit | 35,763 | 36,746 | (983) | (3 | %) | |||||||||||||||||||||
| Gross profit percentage | 18.4 | % | 18.2 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 8,334 | 8,191 | 143 | 2 | % | |||||||||||||||||||||
| Selling and distribution expenses | 12,217 | 12,764 | (547) | (4 | %) | |||||||||||||||||||||
| Restructuring expenses and asset impairments | 169 | 803 | (634) | (79 | %) | |||||||||||||||||||||
| Operating income | 15,043 | 14,988 | 55 | — | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | 20,312 | $ | 21,225 | $ | (913) | (4 | %) | ||||||||||||||||||
Net sales decreased $7,305 for the nine months ended September 30, 2026, compared with the same period in 2025, primarily due to lower sales volumes and a decrease in pricing due to a highly competitive core North American market, which collectively reduced net sales by $11,507. This decrease was partially offset by an increase in international sales of $4,202 primarily due to project timing.
Selling and distribution expenses decreased $547 for the nine months ended September 30, 2026, compared with the same period in 2025, primarily due to a reduction in bad debt expense of $931, partially offset by higher incentive compensation costs of $418.
Restructuring expenses and asset impairments of $169 for the nine months ended September 30, 2026 related to employee severance associated with headcount reductions.
Restructuring expenses and asset impairments of $803 for the nine months ended September 30, 2025 included an asset impairment charge and related contract termination costs associated with exiting a lease totaling $605 and employee severance of $198 associated with headcount reductions.
Operating income was $15,043 for the nine months ended September 30, 2026, compared with operating income of $14,988 in the same period in 2025.
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Adjusted EBITDA decreased for the nine months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating income | $ | 15,043 | $ | 14,988 | |||||||
| Adjustments: | |||||||||||
| Depreciation | 5,100 | 5,434 | |||||||||
| Restructuring expenses and asset impairments | 169 | 803 | |||||||||
| Adjusted EBITDA | $ | 20,312 | $ | 21,225 | |||||||
NobelClad
Three months ended September 30, 2026 compared with three months ended September 30, 2025
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 28,815 | $ | 20,925 | $ | 7,890 | 38 | % | ||||||||||||||||||
| Gross profit | 6,942 | 5,208 | 1,734 | 33 | % | |||||||||||||||||||||
| Gross profit percentage | 24.1 | % | 24.9 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 1,171 | 2,076 | (905) | (44 | %) | |||||||||||||||||||||
| Selling and distribution expenses | 2,045 | 1,870 | 175 | 9 | % | |||||||||||||||||||||
| Restructuring expenses and asset impairments | — | 1,013 | (1,013) | (100 | %) | |||||||||||||||||||||
| Operating income | 3,726 | 249 | 3,477 | 1,396 | % | |||||||||||||||||||||
| Adjusted EBITDA | $ | 4,568 | $ | 2,075 | $ | 2,493 | 120 | % | ||||||||||||||||||
Net sales increased $7,890 for the three months ended September 30, 2026, compared with the same period in 2025, driven principally by shipments associated with a large international petrochemical project.
Gross profit percentage decreased to 24.1% for the three months ended September 30, 2026 primarily due to an unfavorable project mix.
General and administrative expenses decreased $905 for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to the recognition of a remediation liability at a former European cladding site in the three months ended September 30, 2025.
Selling and distribution expenses increased $175 for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to higher incentive compensation costs.
Restructuring expenses and asset impairments of $1,013 for the three months ended September 30, 2025 related to contract termination costs associated with exiting a lease.
Operating income was $3,726 for the three months ended September 30, 2026, compared with operating income of $249 in the same period in 2025, primarily due to higher net sales and corresponding gross profit.
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Adjusted EBITDA increased for the three months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Three months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating income | $ | 3,726 | $ | 249 | |||||||
| Adjustments: | |||||||||||
| Depreciation | 842 | 813 | |||||||||
| Restructuring expenses and asset impairments | — | 1,013 | |||||||||
| Adjusted EBITDA | $ | 4,568 | $ | 2,075 | |||||||
Nine months ended September 30, 2026 compared with nine months ended September 30, 2025
| Nine months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | $ change | % change | |||||||||||||||||||||||
| Net sales | $ | 70,308 | $ | 75,729 | $ | (5,421) | (7 | %) | ||||||||||||||||||
| Gross profit | 16,329 | 19,898 | (3,569) | (18 | %) | |||||||||||||||||||||
| Gross profit percentage | 23.2 | % | 26.3 | % | ||||||||||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||||||||||||
| General and administrative expenses | 3,085 | 4,119 | (1,034) | (25 | %) | |||||||||||||||||||||
| Selling and distribution expenses | 6,283 | 6,277 | 6 | — | % | |||||||||||||||||||||
| Restructuring expenses and asset impairments | — | 1,224 | (1,224) | (100 | %) | |||||||||||||||||||||
| Operating income | 6,961 | 8,278 | (1,317) | (16 | %) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 9,493 | $ | 11,890 | $ | (2,397) | (20 | %) | ||||||||||||||||||
Net sales decreased $5,421 for the nine months ended September 30, 2026, compared with the same period in 2025, driven by the timing of shipments out of backlog and generally lower overall activity levels in the first half of 2026 due in part to the impact of evolving tariff policies.
Gross profit percentage decreased to 23.2% for the nine months ended September 30, 2026 due to an unfavorable project mix as well as lower absorption of fixed manufacturing overhead costs as a result of the decrease in net sales described above.
General and administrative expenses decreased $1,034 for the nine months ended September 30, 2026, compared with the same period in 2025, primarily due to the recognition of a remediation liability at a former European cladding site during the nine months ended September 30, 2025.
Restructuring expenses and asset impairments of $1,224 for the nine months ended September 30, 2025 included contract termination costs associated with exiting a lease totaling $1,013 and employee severance of $211 associated with headcount reductions.
Operating income was $6,961 for the nine months ended September 30, 2026, compared with operating income of $8,278 in the same period in 2025, primarily due to lower net sales and corresponding gross profit.
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Adjusted EBITDA decreased for the nine months ended September 30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.
| Nine months ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating income | $ | 6,961 | $ | 8,278 | |||||||
| Adjustments: | |||||||||||
| Depreciation | 2,532 | 2,388 | |||||||||
| Restructuring expenses and asset impairments | — | 1,224 | |||||||||
| Adjusted EBITDA | $ | 9,493 | $ | 11,890 | |||||||
Liquidity and Capital Resources
We have historically financed our operations from a combination of internally generated cash flow, revolving credit borrowings, and various long-term debt arrangements. Our net debt position was $13,717 at September 30, 2026, compared with $18,746 at December 31, 2025. The decrease was primarily driven by an increase in cash and cash equivalents resulting from improved operating performance and related cash flow generation across all three of our business segments during the three months ended September 30, 2026.
We believe that cash and cash equivalents on hand, cash flow from operations, funds available under our current credit facilities and any future replacement thereof will be sufficient to fund the working capital, required minimum debt service payments, and other capital expenditure requirements of our current business operations for the foreseeable future. We may also execute capital markets transactions, including at-the-market offering programs, to raise additional funds if we believe market conditions are favorable, but there can be no assurance that any future capital will be available on acceptable terms or at all. Nevertheless, our ability to generate sufficient cash flows from operations will depend upon our success in executing our strategies. If we are unable to (i) realize sales from our backlog; (ii) secure new customer orders; (iii) continue selling products at profitable margins; and (iv) continue to implement cost-effective internal processes, our ability to meet cash requirements through operating activities could be impacted. Furthermore, any restriction on the availability of borrowings under our credit facilities could negatively affect our ability to meet future cash requirements. We will continue to monitor our short-term and long-term liquidity needs, which could be affected by financial market conditions, including the related impact on credit availability and capital markets.
Debt facilities
On February 6, 2024, the Company and certain domestic subsidiaries entered into an amendment (the “First Amendment”) to its existing credit agreement with a syndicate of banks, led by KeyBank National Association (the “credit facility”). The First Amendment provided for certain changes to the credit facility and increased the maximum commitment amount from $200,000 to $300,000. The credit facility originally allowed for revolving loans of up to $200,000, a $50,000 term loan facility, and a $50,000 delayed draw term loan (“DDTL”) facility. On February 6, 2026, the ability of the Company to access the $50,000 DDTL facility expired per the terms of the First Amendment. The $50,000 term loan facility is payable in installments of $938 per quarter through March 31, 2028. Quarterly term loan payments increase to $1,250 from June 30, 2028, through December 31, 2028. A balloon payment for the outstanding term loan balance is due upon the credit facility maturity date of February 6, 2029. The credit facility retains a $100,000 accordion feature to increase the commitments under the revolving loan and/or by adding one or more term loans subject to approval by the applicable lenders. The credit facility is secured by certain assets of DMC including accounts receivable, inventory, and fixed assets, including Arcadia Products and its subsidiary, as well as guarantees and share pledges by DMC and its subsidiaries.
Borrowings under the $200,000 revolving loan limit and $50,000 term loan can be in the form of SOFR loans or one month Adjusted Term SOFR loans. Additionally, U.S. dollar borrowings on the revolving loan can be in the form of Base Rate loans (Base Rate borrowings are based on the greater of the administrative agent’s Prime rate, an adjusted Federal Funds rate or an adjusted SOFR rate). SOFR loans bear interest at the applicable SOFR rate plus an applicable margin (varying from 2.25% to 3.25%). Base Rate loans bear interest at the defined Base Rate plus an applicable margin (varying from 1.25% to 2.25%).
The credit facility includes various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurring additional indebtedness; mortgaging, pledging or
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disposition of major assets; and maintenance of specified ratios. As of September 30, 2026, we were in compliance with all financial covenants and other provisions of our debt agreements.
The leverage ratio is defined in the credit facility as the ratio of Consolidated Funded Indebtedness (as defined in the credit facility) on the last day of any trailing four quarter period to Consolidated EBITDA (as defined in the credit facility) for such period. The maximum leverage ratio permitted by our credit facility is 3.0 to 1.0; provided, however, that the Second Amendment (as defined below) provides for a temporary increase in the maximum leverage ratio under certain circumstances as described below. The actual leverage ratio as of September 30, 2026 was 1.41 to 1.0.
The debt service coverage ratio is defined in the credit facility as the ratio of Consolidated EBITDA less the sum of capital distributions paid in cash (other than those made with respect to preferred stock issued under the Operating Agreement), Consolidated Unfunded Capital Expenditures (as defined in the credit facility), and net cash income taxes divided by the sum of cash interest expense, any dividends on the preferred stock paid in cash, and scheduled principal payments on funded indebtedness. Under our credit facility, the minimum debt service coverage ratio permitted is 1.25 to 1.0. The actual debt service coverage ratio for the trailing twelve months ended September 30, 2026, was 3.64 to 1.0.
On June 10, 2025, the Company and certain domestic subsidiaries entered into an amendment to the credit facility (the “Second Amendment”) which provided for certain changes to the credit facility, including modifications to the Company’s financial covenants and applicable interest rates to assist with the possible acquisition of the remaining 40% minority interest in Arcadia Products. Key provisions of the Second Amendment include a temporary increase in the Company’s maximum leverage ratio to 3.5x adjusted EBITDA over the trailing 12 months — up from 3.0x — should either the Put Option or the Call Option be exercised. This elevated leverage limit will apply for the first two quarters following payment of the purchase price of the Put Option or the Call Option, followed by a reduction to 3.25x in the third quarter, and a return to 3.0x thereafter.
As of September 30, 2026, borrowings of $43,125 on the term loan under our credit facility were outstanding, and $9,575 was outstanding on the revolver.
We also maintain a line of credit with a German bank for certain European operations. This line of credit provides a borrowing capacity of €7,000. As of September 30, 2026, we had no outstanding borrowings, and bank guarantees of €3,038 were secured.
Redeemable noncontrolling interest
The Operating Agreement for Arcadia Products contains a right for the Company to purchase the remaining interest in Arcadia Products from the minority interest holder on or after December 23, 2024 (“Call Option”). The minority interest holder of Arcadia Products also has the right to sell its remaining interest in Arcadia Products to the Company (“Put Option”). The Put Option became exercisable on September 6, 2026. As of September 30, 2026, and through the date of the filing of this report, the minority interest holder has not exercised the Put Option.
The purchase price for any interests sold pursuant to the Call Option or Put Option is based upon a predefined calculation as included within the Operating Agreement. The calculation is based on a multiple of Arcadia Products’ adjusted EBITDA over a defined period or, if higher, a “Floor Value” for 100% of Arcadia Products equal to $467,700 (or $187,080 for the minority owner’s 40% interest), in each case subject to certain adjustments. In connection with an exercise of the Call Option, the Operating Agreement would require payment of the purchase price in cash. However, in connection with the exercise of the Put Option, the Operating Agreement permits the Company the option to pay the purchase price in either cash, or 20% in cash and 80% in shares of a newly designated series of preferred stock (the “Put Preferred”) that would be authorized at that time. The terms of the Put Preferred, including the rights, powers and preferences thereof, as set forth in the Operating Agreement, would be replicated in a Certificate of Designations to be filed with the Secretary of State of the State of Delaware.
The number of shares of Put Preferred to be issued in connection with the Put Option (if the Company utilizes that payment mechanism) would be initially determined and valued at the volume weighted average trading price of the Company’s common stock over the 60 days preceding the delivery of the Put Option notice. The Put Preferred would be entitled to dividends at a rate of 3% per annum and would vote with and be convertible into one share of the Company’s common stock. However, in order to comply with applicable Nasdaq rules, the voting and conversion rights of the Put Preferred would initially be limited to 19.9% of the number of shares of DMC common stock outstanding immediately prior to the issuance of the Put Preferred. This voting and conversion cap would be removed only if such removal is approved by DMC’s stockholders. The holder of the Put Preferred would not be allowed to participate in any such stockholder vote. Based on the purchase price definition set forth in the Operating Agreement and the current price of DMC common stock, it is likely that if the Put Preferred
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is issued, a stockholder vote to remove the voting and conversion cap would result in the minority interest holder acquiring majority voting control of the Company through the involuntary dilution of the existing stockholders.
Upon issuance, the Company may redeem the Put Preferred at any time; however, beginning on June 23, 2027, the Company would begin proportionate annual redemptions of the Put Preferred, provided that the Put Preferred must be redeemed by the third anniversary of its issuance, subject in all cases to the availability of sufficient funds to effect such redemptions as described below.
As of September 30, 2026, the value of the redeemable noncontrolling interest under the Operating Agreement was $187,080. Upon settlement, consideration paid will be net of the $24,902 promissory note outstanding due from the redeemable noncontrolling interest holder and is subject to potential working capital adjustments. Refer to Note 2 in Part I, Item 1 for further information related to the valuation of the redeemable noncontrolling interest and promissory note outstanding. We are currently evaluating options for financing the purchase of the noncontrolling interest, which may include cash generated from operations, borrowings under the credit facility, and/or proceeds from debt or equity issuances. Debt financing could materially impact the Company’s leverage while equity financing could materially dilute existing stockholders. Furthermore, as described in Note 2 in Part I, Item 1, and in Item 1A in Part II of this report, our ability to redeem the Put Preferred, if such shares are issued in connection with the Put Option, is subject to certain statutory and common law limitations under Delaware law.
Other contractual obligations and commitments
Our debt balance, net of deferred debt issuance costs, increased to $51,674 at September 30, 2026, from $50,644 at December 31, 2025. Our other contractual obligations and commitments have not materially changed since December 31, 2025.
Cash flows from operating activities
Net cash provided by operating activities was $7,170 for the nine months ended September 30, 2026, compared to $38,340 in the same period last year. The decrease was largely driven by higher working capital balances, which included increased inventory levels given the recent and expected rise in activity levels, as well as higher raw material input costs at Arcadia Products.
Cash flows from investing activities
Net cash used in investing activities for the nine months ended September 30, 2026 of $2,521 was attributable to the acquisition, net of proceeds received, of property, plant and equipment.
Net cash used in investing activities for the nine months ended September 30, 2025 of $3,047 was attributable to the acquisition, net of proceeds received, of property, plant and equipment of $7,214, partially offset by the settlement of a note receivable of $4,167.
Cash flows from financing activities
Net cash provided by financing activities for the nine months ended September 30, 2026 of $240 included net credit facility borrowings of $700, which were partially offset by treasury stock purchases of $460.
Net cash used in financing activities for the nine months ended September 30, 2025 of $22,149 included net credit facility repayments of $14,521, distributions to the redeemable noncontrolling interest holder of $6,400, payment of debt issuance costs of $650, and treasury stock purchases of $578.
Payment of Dividends
Any determination to pay cash dividends is at the discretion of the Board. Future dividends may be affected by, among other items, our views on potential future capital requirements, future business prospects, debt covenant compliance considerations, changes in income tax laws, and any other factors that the Board deems relevant.
Critical Accounting Estimates
Preparation of financial statements in conformity with generally accepted accounting principles in the United States requires that management make estimates, judgments and assumptions that affect the amounts reported for revenues, expenses,
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assets, liabilities, and other related disclosures. Our critical accounting estimates have not changed from those reported in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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ITEM 3. Quantitative and Qualitative Disclosure about Market Risk
There were no material changes in market risk for changes in foreign currency exchange rates and interest rates from the information provided in Item 7A – Quantitative and Qualitative Disclosures About Market Risk in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as amended, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There were no changes that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings
Refer to Note 11 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this report.
Item 1A. Risk Factors
There have been no material changes in the risk factors identified as being attendant to our business in our Annual Report on Form 10-K for the year ended December 31, 2025, except as provided below.
The conflict between the United States, Israel and Iran and related geopolitical instability may adversely affect our business.
In February 2026, the United States and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the region. Although we do not have operations in the Middle East, we sell products into the region, and the ongoing conflict and any further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, cyberattacks, or other governmental or market responses, has and could continue to lead to significant disruption of global energy supplies and increases in global energy prices, heighten inflationary pressures on our input costs and supply chain, adversely affect global supply chains, energy markets, commodity prices, currency exchange rates, interest rates, financial markets and overall macroeconomic conditions, increase the cost or reduce the availability of debt financing, and adversely impact customer spending patterns in markets in which we operate. In particular, the price of aluminum, the most important raw material for Arcadia Products, rose to multi-year highs earlier in 2026 in part due to the ongoing conflict and the difficulty in sourcing and transporting this material, and while prices have since declined from those highs, they remain elevated and volatile and could increase again if disruptions in the region persist or intensify. While the impacts of conflict between the United States, Israel, and Iran may have an adverse effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time.
Our ability to redeem the Put Preferred, if such shares are issued in connection with the Put Option, is subject to certain statutory and common law limitations under Delaware law.
As described in Note 2 of the Notes to the Condensed Consolidated Financial Statements, in connection with the exercise of the Put Option, we may issue shares of Put Preferred. Beginning on June 23, 2027, we would begin proportionate annual redemptions of the Put Preferred, provided that the Put Preferred must be redeemed by the third anniversary of its issuance, subject in all cases to the availability of sufficient funds to effect such redemptions. Specifically, under Section 160(a) of the DGCL, a corporation may not purchase or redeem its own shares of capital stock when the capital of the corporation is, or as a result of such transaction would be, impaired. Further, the Delaware courts have stated that a corporation may not redeem shares if doing so “diminishes the ability of the company to pay its debts, or lessens the security of its creditors.” Accordingly, we may be restricted from making redemption payments if our capital is impaired, if making the payments would impair our capital or in other circumstances, including where the payment would threaten our ability to continue as a going concern.
In assessing whether we have funds legally available to redeem our shares of our capital stock, the Board will be required to make a good faith determination, based upon available data and by methods that the Board reasonably believes reflect present values, as to whether we can meet the statutory surplus and common law requirements for each redemption. Such determination may include consideration of the fair value of our assets and liabilities, including any contingent liabilities discounted for probability and timing, our projected cash flows and liquidity needs. There can be no assurance that we will meet the Delaware statutory surplus and common law requirements to redeem the Put Preferred on the scheduled redemption dates.
Item 5. Other Information
During the quarter ended September 30, 2026, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted terminated
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Item 6. Exhibits
Exhibit Number | Exhibit Description | ||||
| 31.1* | Certification of the President and Chief Executive Officer pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 31.2* | Certification of the Chief Financial Officer pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 32.1** | Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
| 32.2** | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
101.INS | Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH* | Inline XBRL Schema Document | ||||
| 101.CAL* | Inline XBRL Calculation Linkbase Document | ||||
| 101.LAB* | Inline XBRL Label Linkbase Document | ||||
| 101.PRE* | Inline XBRL Presentation Linkbase Document | ||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS) | ||||
__________________
| * | Filed with this report. | ||||
| ** | Furnished with this report. | ||||
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DMC Global Inc. | |||||||||||
| (Registrant) | |||||||||||
| Date: | October 27, 2026 | /s/ Eric V. Walter | |||||||||
| Eric V. Walter, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) | |||||||||||
| Date: | October 27, 2026 | /s/ Brett Seger | |||||||||
| Brett Seger, Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer) | |||||||||||
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