SECURITIES AND EXCHANGE COMMISSION

(Exact name of Registrant as Specified in its Charter)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer☐

Accelerated filer ☒

~~Large accelerated filer~~ o

~~Accelerated filer~~ x

~~Non-accelerated filer~~ o

~~(Do not check if smaller reporting company)~~

~~Smaller reporting company~~ o

Emerging growth company o

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 and section 21E of the Securities Exchange Act of 1934. 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,” and other phrases of similar meaning. Such statements include ~~projections, guidance~~expectations regarding North American well completion activity in the fourth quarter of 2023, anticipated profit margin improvements resulting from changes in manufacturing processes and ~~other statements~~the introduction of new products in DynaEnergetics, our expectations regarding ~~our expected financial position and operating results,~~the decrease in patent litigation expenses in DynaEnergetics during the remainder of 2023, the expected ~~impacts~~improved performance in Arcadia during the remainder of 2023, the expected benefits of the completion of phase one of the new ~~accounting standards and~~enterprise resource planning system at Arcadia, projected increases in demand at NobelClad, our backlog at NobelClad, our ability to access capital markets transactions in the ~~timing~~future, the availability of our implementation thereof, our business strategy, expectations regarding NobelClad's end markets and activity levels, comments regarding expanding demand for DynaEnergetics' products, particularly DynaSelect^TM ~~and DynaStage~~^TM~~, expected expansion plans in Blum, Texas, Troisdorf, Germany and Mt. Braddock, Pennsylvania,~~funds to support our liquidity position and ~~factors impacting such position, including expectations regarding legal costs, and the outcome of any pending litigation or contingencies.~~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, ~~2016~~2022 and such things as the following: ~~changes in global~~geopolitical and economic ~~conditions;~~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 ~~shipment;~~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 ~~material;~~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; current or future limits on manufacturing capacity at our various operations; our ability to successfully integrate ~~acquired businesses;~~Arcadia; 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; global economic conditions; and ~~general economic conditions, both domestic~~wars, terrorism and ~~foreign, impacting our business and the business of the end-market users we serve.~~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.

INDEX


				Page
PART I - FINANCIAL INFORMATION

			~~Page~~
~~PART I - FINANCIAL INFORMATION~~

Item 1	Condensed Consolidated Financial Statements		34

		Condensed Consolidated Balance Sheets as of ~~September 30, 2017~~Sep tember 3 0, 2023 (unaudited) and December 31, ~~2016~~2022		34
		Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)		5
		Condensed Consolidated Statements of Comprehensive ~~Loss~~Income for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)		6
		Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity and Redeemable Noncontrolling Interest for the three and nine ~~months~~m onths ended September 30, ~~2017~~2023 and 2022 (unaudited)		7
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 (unaudited)		89
		Notes to Condensed Consolidated Financial Statements (unaudited)		910

Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations		1923

Item 3		Quantitative and Qualitative Disclosure about Market Risk		3138

Item 4		Controls and Procedures		3138

PART II - OTHER INFORMATION

Item 1		Legal Proceedings		3339

Item 1A		Risk Factors		3339

Item 2		Unregistered Sales of Equity Securities and Use of Proceeds		3339

Item 3		Defaults Upon Senior Securities		3339

Item 4		Mine Safety Disclosures		3339

Item 5		Other Information		3339

Item 6		Exhibits		3340

		Signatures		3540

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, 2023		December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	28,060	$	25,144
Marketable securities	7,516		—
Accounts receivable, net of allowance for doubtful accounts of $945 and $925, respectively	105,519		94,415
Inventories	185,777		156,590
Prepaid expenses and other	9,945		10,723


Total current assets	336,817		286,872
Property, plant and equipment	217,791		211,277
Less - accumulated depreciation	(91,696)		(81,832)
Property, plant and equipment, net	126,095		129,445
Goodwill	141,725		141,725

Purchased intangible assets, net	200,925		217,925
Deferred tax assets	6,843		7,633
Other assets	83,873		95,378
Total assets	$	896,278	$	878,978

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	45,589	$	46,816
Accrued expenses	12,623		8,415


Accrued income taxes	11,527		4,256
Accrued employee compensation and benefits	15,638		14,441
Contract liabilities	28,557		32,080
Current portion of long-term debt	15,000		15,000
Other current liabilities	8,693		7,042

Total current liabilities	137,627		128,050
Long-term debt	104,460		117,798

Deferred tax liabilities	3,336		1,908
Other long-term liabilities	58,167		63,053
Total liabilities	303,590		310,809
Commitments and contingencies (Note 11)
Redeemable noncontrolling interest	187,522		187,522
Stockholders’ equity
Preferred stock, $0.05 par value; 4,000,000 shares authorized; no issued and outstanding shares	—		—
Common stock, $0.05 par value; 50,000,000 shares authorized; 20,457,257 and 20,140,654 shares issued, respectively	1,022		1,007
Additional paid-in capital	312,152		303,893
Retained earnings	146,421		125,215
Other cumulative comprehensive loss	(29,846)		(28,758)
Treasury stock, at cost, and company stock held for deferred compensation, at par; 693,538 and 605,723 shares, respectively	(24,583)		(20,710)


Total stockholders’ equity	405,166		380,647
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity	$	896,278	$	878,978

September 30, December 31,
2017 2016
(unaudited)
ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 8,861
$ 6,419
Accounts receivable, net of allowance for doubtful accounts of $1,102 and $1,146, respectively 45,443
32,959
Inventory, net 31,489
28,833
Prepaid expenses and other 5,293
5,148

Total current assets 91,086
73,359

PROPERTY, PLANT AND EQUIPMENT 118,752
109,427
Less - accumulated depreciation (59,167 ) (52,294 )

Property, plant and equipment, net 59,585
57,133

GOODWILL, net —
16,097

PURCHASED INTANGIBLE ASSETS, net 13,980
15,827

OTHER ASSETS, net 215
139

TOTAL ASSETS $ 164,866
$ 162,555

~~The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.~~

~~Table of Contents~~

~~DMC GLOBAL INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~(Amounts in Thousands, Except Share and Per Share Data)~~

September 30, December 31,
2017 2016
(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable $ 15,794
$ 13,260
Accrued expenses 4,188
4,173
Accrued anti-dumping duties 3,585
6,550
Dividend payable 295
290
Accrued income taxes 958
548
Accrued employee compensation and benefits 5,437
3,307
Customer advances 2,772
2,619

Total current liabilities 33,029
30,747

LINES OF CREDIT 21,958
15,732

DEFERRED TAX LIABILITIES 1,040
1,448

OTHER LONG-TERM LIABILITIES 2,534
2,219

Total liabilities 58,561
50,146

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS’ EQUITY:
Preferred stock, $0.05 par value; 4,000,000 shares authorized; no issued and outstanding shares —
—
Common stock, $0.05 par value; 25,000,000 shares authorized; 14,769,342 and 14,496,359 shares outstanding, respectively 740
725
Additional paid-in capital 75,380
73,116
Retained earnings 62,330
80,107
Other cumulative comprehensive loss (31,784 ) (41,514 )
Treasury stock, at cost; 39,783 and 2,378 shares, respectively (361 ) (25 )

Total stockholders’ equity 106,305
112,409

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 164,866
$ 162,555

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

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,
	2023		2022		2023		2022
Net sales	$	172,147	$	174,465	$	545,152	$	479,012
Cost of products sold	119,550		123,127		378,454		338,669
Gross profit	52,597		51,338		166,698		140,343
Costs and expenses:
General and administrative expenses	16,259		19,796		60,285		56,330
Selling and distribution expenses	12,454		10,748		36,978		31,383
Amortization of purchased intangible assets	5,667		7,385		17,001		33,154

Restructuring expenses and asset impairments	515		8		515		53


Total costs and expenses	34,895		37,937		114,779		120,920
Operating income	17,702		13,401		51,919		19,423
Other income (expense):
Other income (expense), net	302		120		(337)		(35)
Interest expense, net	(2,392)		(1,771)		(7,205)		(4,058)
Income before income taxes	15,612		11,750		44,377		15,330
Income tax provision	4,087		3,537		13,187		4,938





Net income	$	11,525	$	8,213	$	31,190	$	10,392
Less: Net income attributable to redeemable noncontrolling interest	2,642		1,496		7,695		1,411
Net income attributable to DMC Global Inc. stockholders	$	8,883	$	6,717	$	23,495	$	8,981

Net income per share attributable to DMC Global Inc. stockholders:
Basic	$	0.38	$	0.46	$	1.07	$	0.20
Diluted	$	0.38	$	0.46	$	1.07	$	0.20
Weighted average shares outstanding:
Basic	19,543,251		19,381,489		19,492,212		19,352,638
Diluted	19,596,575		19,381,794		19,540,978		19,357,333

Reconciliation to net income 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,
	2023		2022		2023		2022
Net income attributable to DMC Global Inc. stockholders	$	8,883	$	6,717	$	23,495	$	8,981
Adjustment of redeemable noncontrolling interest	(1,263)		2,256		(2,289)		(4,996)
Net income attributable to DMC Global Inc. stockholders after adjustment of redeemable noncontrolling interest	$	7,620	$	8,973	$	21,206	$	3,985

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
NET SALES $ 52,161
$ 36,553
$ 138,314
$ 118,402
COST OF PRODUCTS SOLD 34,999
28,096
96,767
89,652
Gross profit 17,162
8,457
41,547
28,750
COSTS AND EXPENSES:

General and administrative expenses 6,535
5,685
19,821
15,522
Selling and distribution expenses 4,446
3,832
13,420
12,352
Amortization of purchased intangible assets 1,046
1,009
3,034
3,023
Restructuring expenses —
373
458
1,202
Goodwill impairment charge 17,584
—
17,584
—
Total costs and expenses 29,611
10,899
54,317
32,099
OPERATING LOSS (12,449 ) (2,442 ) (12,770 ) (3,349 )
OTHER INCOME (EXPENSE):

Other income (expense), net (436 ) (157 ) (965 ) 178
Interest expense (367 ) (265 ) (1,203 ) (826 )
Interest income —
—
2
2
LOSS BEFORE INCOME TAXES (13,252 ) (2,864 ) (14,936 ) (3,995 )
INCOME TAX PROVISION 812
272
1,956
321
NET LOSS $ (14,064 ) $ (3,136 ) $ (16,892 ) $ (4,316 )

LOSS PER SHARE

Basic $ (0.98 ) $ (0.22 ) $ (1.18 ) $ (0.31 )
Diluted $ (0.98 ) $ (0.22 ) $ (1.18 ) $ (0.31 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:

Basic 14,368,225
14,195,921
14,333,452
14,105,594
Diluted 14,368,225
14,195,921
14,333,452
14,105,594

DIVIDENDS DECLARED PER COMMON SHARE $ 0.02
$ 0.02
$ 0.06
$ 0.06

Table of Contents

DMC GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)

(unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net income	$	11,525	$	8,213	$	31,190	$	10,392

Change in cumulative foreign currency translation adjustment	(2,303)		(3,472)		(1,088)		(7,263)
Other comprehensive income	$	9,222	$	4,741	$	30,102	$	3,129

Less: comprehensive income attributable to redeemable noncontrolling interest	2,642		1,496		7,695		1,411

Comprehensive income attributable to DMC Global Inc. stockholders	$	6,580	$	3,245	$	22,407	$	1,718

Table of Contents

DMC GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE LOSS~~STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST

(Amounts in ~~Thousands)~~Thousands, Except Share Data)

(unaudited)


								Other		Treasury Stock, at cost, and			Total		Redeemable
				Additional				Cumulative		Company Stock Held for			DMC Global Inc.		Non-
	Common Stock			Paid-In		Retained		Comprehensive		Deferred Compensation, at par			Stockholders’		Controlling
	Shares	Amount		Capital		Earnings		Loss		Shares	Amount		Equity		Interest
Balances, December 31, 2022	20,140,654	$	1,007	$	303,893	$	125,215	$	(28,758)	(605,723)	$	(20,710)	$	380,647	$	187,522
Net income	—	—		—		909		—		—	—		909		1,230
Change in cumulative foreign currency translation adjustment	—	—		—		—		769		—	—		769		—
Shares issued in connection with stock compensation plans	258,807	13		(13)		—		—		—	—		—		—
Stock-based compensation	—	—		4,795		—		—		—	—		4,795		232
Distribution to redeemable noncontrolling interest holder	—	—		—		—		—		—	—		—		(2,600)
Adjustment of redeemable noncontrolling interest	—	—		—		(1,138)		—		—	—		(1,138)		1,138
Treasury stock activity	—	—		—		—		—		(77,184)	(3,705)		(3,705)		—
Balances, March 31, 2023	20,399,461	$	1,020	$	308,675	$	124,986	$	(27,989)	(682,907)	$	(24,415)	$	382,277	$	187,522
Net income	—	—		—		13,703		—		—	—		13,703		3,823
Change in cumulative foreign currency translation adjustment	—	—		—		—		446		—	—		446		—


Shares issued in connection with stock compensation plans	50,582	2		210		—		—		—	—		212		—




Stock-based compensation	—	—		1,570		—		—		—	—		1,570		129

Distribution to redeemable noncontrolling interest holder	—	—		—		—		—		—	—		—		(3,840)
Adjustment of redeemable noncontrolling interest	—	—		—		112		—		—	—		112		(112)
Treasury stock activity	—	—		—		—		—		(2,635)	(14)		(14)		—

Balances, June 30, 2023	20,450,043	$	1,022	$	310,455	$	138,801	$	(27,543)	(685,542)	$	(24,429)	$	398,306	$	187,522
Net income	—	—		—		8,883		—		—	—		8,883		2,642
Change in cumulative foreign currency translation adjustment	—	—		—		—		(2,303)		—	—		(2,303)		—
Shares issued in connection with stock compensation plans	7,214	—		—		—		—		—	—		—		—
Stock-based compensation	—	—		1,697		—		—		—	—		1,697		135
Distribution to redeemable noncontrolling interest holder	—	—		—		—		—		—	—		—		(4,040)
Adjustment of redeemable noncontrolling interest	—	—		—		(1,263)		—		—	—		(1,263)		1,263
Treasury stock activity	—	—		—		—		—		(7,996)	(154)		(154)		—
Balances, September 30, 2023	20,457,257	$	1,022	$	312,152	$	146,421	$	(29,846)	(693,538)	$	(24,583)	$	405,166	$	187,522

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				Cumulative		Company Stock Held for			DMC Global Inc.		Non-
	Common Stock			Paid-In		Retained		Comprehensive		Deferred Compensation, at par			Stockholders’		Controlling
	Shares	Amount		Capital		Earnings		Loss		Shares	Amount		Equity		Interest
Balances, December 31, 2021	19,920,829	$	996	$	294,515	$	111,031	$	(26,538)	(570,415)	$	(19,479)	$	360,525	$	197,196
Net loss	—	—		—		(3,288)		—		—	—		(3,288)		(992)
Change in cumulative foreign currency translation adjustment	—	—		—		—		(1,204)		—	—		(1,204)		—
Shares issued in connection with stock compensation plans	163,443	8		(8)		—		—		—	—		—		—
Consideration adjustment related to redeemable noncontrolling interest	—	—		—		—		—		—	—		—		(427)
Stock-based compensation	—	—		2,267		—		—		—	—		2,267		102
Distribution to redeemable noncontrolling interest holder	—	—		—		—		—		—	—		—		(4,400)
Adjustment of redeemable noncontrolling interest	—	—		—		(5,717)		—		—	—		(5,717)		5,717
Treasury stock activity	—	—		—		—		—		(16,773)	(1,088)		(1,088)		—
Balances, March 31, 2022	20,084,272	$	1,004	$	296,774	$	102,026	$	(27,742)	(587,188)	$	(20,567)	$	351,495	$	197,196
Net income	—	—		—		5,552		—		—	—		5,552		907
Change in cumulative foreign currency translation adjustment	—	—		—		—		(2,587)		—	—		(2,587)		—


Shares issued in connection with stock compensation plans	35,657	2		(2)		—		—		—	—		—		—




Stock-based compensation	—	—		2,133				—		—	—		2,133		158
Distribution to redeemable noncontrolling interest holder	—	—		—		—		—		—	—		—		(2,600)
Adjustment of redeemable noncontrolling interest	—	—		—		(1,535)		—		—	—		(1,535)		1,535
Treasury stock activity	—	—		—		—		—		(10,570)	(3)		(3)		—
Balances, June 30, 2022	20,119,929	$	1,006	$	298,905	$	106,043	$	(30,329)	(597,758)	$	(20,570)	$	355,055	$	197,196
Net income	—	—		—		6,717		—		—	—		6,717		1,496
Change in cumulative foreign currency translation adjustment	—	—		—		—		(3,472)		—	—		(3,472)		—
Shares issued in connection with stock compensation plans	7,750	1		(1)		—		—		—	—		—		—
Consideration adjustments related to redeemable noncontrolling interest	—	—		—		—		—		—	—		—		1,783
Adjustment of redeemable noncontrolling interest	—	—		—		2,256		—		—	—		2,256		(2,256)
Stock-based compensation	—	—		2,099		—		—		—	—		2,099		143
Distribution to redeemable noncontrolling interest holder	—	—		—		—		—		—	—		—		(3,400)
Treasury stock activity	—	—		—		—		—		(64)	(2)		(2)		—
Balances, September 30, 2022	20,127,679	$	1,007	$	301,003	$	115,016	$	(33,801)	(597,822)	$	(20,572)	$	362,653	$	194,962

Table of Contents

~~DMC GLOBAL INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY~~

~~(Amounts in Thousands, Except Share Data)~~

~~(unaudited)~~

~~The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.~~

~~Table of Contents~~

DMC GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

(unaudited)


	Nine months ended September 30,
	2023		2022
Cash flows provided by operating activities:
Net income	$	31,190	$	10,392
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation	10,294		10,578
Amortization of purchased intangible assets	17,001		33,154
Amortization of deferred debt issuance costs	412		412
Amortization of acquisition-related inventory valuation step-up	—		430
Stock-based compensation	8,558		6,891

Deferred income taxes	2,218		(1,612)
Restructuring expenses and asset impairments	515		53
Other	(2,040)		(295)


Change in:
Accounts receivable, net	(11,416)		(24,421)
Inventories	(29,460)		(31,311)
Prepaid expenses and other	14,185		3,736
Accounts payable	(1,485)		2,925
Contract liabilities	(3,450)		9,277

Accrued expenses and other liabilities	6,226		4,126
Net cash provided by operating activities	42,748		24,335

Cash flows used in investing activities:

Investment in marketable securities	(7,516)		—

Consideration adjustments related to acquisition of business	—		(2,034)


Acquisition of property, plant and equipment	(7,455)		(11,277)



Net cash used in investing activities	(14,971)		(13,311)

Cash flows used in financing activities:

Repayments on term loan	(13,750)		(11,250)




Payment of debt issuance costs	—		(179)
Distributions to redeemable noncontrolling interest holder	(10,345)		(10,293)


Net proceeds from issuance of common stock to employees and directors	212		—
Treasury stock purchases	(2,328)		(1,092)

Net cash used in financing activities	(26,211)		(22,814)

Effects of exchange rates on cash	1,350		(534)

Net increase (decrease) in cash and cash equivalents	2,916		(12,324)
Cash and cash equivalents, beginning of the period	25,144		30,810
Cash and cash equivalents, end of the period	$	28,060	$	18,486

Nine months ended September 30,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ (16,892 ) $ (4,316 )
Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation (including capital lease amortization) 5,030
5,024
Amortization of purchased intangible assets 3,034
3,023
Amortization of deferred debt issuance costs 359
123
Stock-based compensation 2,125
1,599
Deferred income tax (408 ) (563 )
Gain (loss) on disposal of property, plant and equipment (46 ) 35
Restructuring expenses 458
1,202
Goodwill impairment charge 17,584
—
Change in:

Accounts receivable, net (10,747 ) 10,480
Inventory, net (1,221 ) 3,400
Prepaid expenses and other 20
(347 )
Accounts payable 1,051
(3,166 )
Customer advances 97
180
Accrued anti-dumping duties (2,965 ) 128
Accrued expenses and other liabilities 3,039
1,037
Net cash provided by operating activities 518
17,839

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property, plant and equipment (3,299 ) (4,070 )
Proceeds on sale of property, plant and equipment 2
31
Change in other non-current assets —
31
Net cash used in investing activities (3,297 ) (4,008 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings (repayments) on bank lines of credit, net 6,000
(12,250 )
Payment on capital lease obligations —
(3 )
Payment of dividends (880 ) (861 )
Payment of deferred debt issuance costs (133 ) —
Net proceeds from issuance of common stock to employees and directors 154
190
Treasury stock purchases (336 ) (21 )
Net cash provided by (used in) financing activities 4,805
(12,945 )

EFFECTS OF EXCHANGE RATES ON CASH 416
274

NET INCREASE IN CASH AND CASH EQUIVALENTS 2,442
1,160
CASH AND CASH EQUIVALENTS, beginning of the period 6,419
6,291
CASH AND CASH EQUIVALENTS, end of the period $ 8,861
$ 7,451

The information included in the ~~condensed consolidated financial statements~~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. ~~These condensed~~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, ~~2016.~~2022.

Principles of Consolidation

The ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements include the accounts of DMC Global Inc. ~~("DMC"~~(“DMC”, “we”, “us”, “our”, or the “Company”) and its controlled subsidiaries. Only subsidiaries in which controlling interests are maintained are consolidated. All ~~significant~~ intercompany accounts, profits, and transactions have been eliminated in consolidation.

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 business segment and analyze each segment’s accounts receivable balances as separate populations. Within each segment, receivables exhibit similar risk characteristics.

During the three and nine months ended September 30, 2023, our expected loss rate reflects uncertainties in market conditions present in our businesses, including supply chain disruptions, rising interest rates, as well as global geopolitical and economic instability. In addition, we reviewed receivables outstanding, including aged balances, and in circumstances where we are aware of a specific customer’s inability to meet its financial obligation to us, we recorded a specific allowance against the amounts due, reducing the net receivable recognized to the amount we estimate will be collected. The offsetting expense for allowances recorded is charged to “Selling and distribution expenses” in our Condensed Consolidated Statements of Operations. During the three and nine months ended September 30, 2023, net provisions of $317 and $141, respectively, were recorded.

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		DynaEnergetics		NobelClad		DMC Global Inc.
Allowance for doubtful accounts, December 31, 2022	$	244	$	603	$	78	$	925

Current period provision for expected credit losses	—		451		—		451
Write-offs charged against the allowance			(120)		—		(120)
Recoveries of amounts previously reserved	(184)		(126)		—		(310)
Impacts of foreign currency exchange rates and other	—		1		(2)		(1)
Allowance for doubtful accounts, September 30, 2023	$	60	$	809	$	76	$	945

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”). The limited liability company operating agreement for Arcadia (the “Operating Agreement”) contains a right for the Company to purchase the remaining interest in Arcadia from the minority interest holder on or after the third anniversary of the acquisition closing date (“Call Option”). Similarly, the minority interest holder of Arcadia has the right to sell its remaining interest in Arcadia to the Company on or after the third anniversary of the acquisition closing date (“Put Option”). Both the Call Option and Put Option enable the respective holder to exercise their rights based upon a predefined calculation as included within the Operating Agreement.

The Company initially accounted for the noncontrolling interest at its acquisition date fair value. We determined that neither the Call Option nor the Put Option meet the definition of a derivative as the Operating Agreement does not allow for contractual net settlement, the options cannot be settled outside the Operating Agreement through a market mechanism, and the underlying shares are deemed illiquid as they are not publicly traded and thus not considered readily convertible to cash. Additionally, the settlement price for both options is based upon a predefined calculation tied to adjusted earnings rather than a fixed price, and the formula is based upon a multiple of Arcadia’s average adjusted earnings over a three-year period. As such, we have concluded that the Call Option and Put Option are embedded within the noncontrolling interest and therefore do not represent freestanding instruments.

Given that the noncontrolling interest 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 therefore does not impact the Condensed Consolidated Statements of Operations or Comprehensive Income (Loss). As of September 30, 2023 and December 31, 2022, the redeemable noncontrolling interest is $187,522.

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, whether received upon exercise of the Put Option, the Call Option or upon sales 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.

The Company’s revenues are primarily derived from consideration paid by customers for tangible goods. The Company analyzes its different products by business 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.

Our rights to payments for goods transferred to customers within our DynaEnergetics and NobelClad business segments arise when control is transferred at a point in time and not on any other criteria. Our rights to payments for goods transferred to customers within our Arcadia business segment also generally arise when control is transferred at a point in time; however, at times, control of certain customized, project-based products passes to the customer over time. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 90 days across all of our segments. In instances when we require customers to make advance payments prior to the shipment of their orders, we record a contract liability. We have determined that our contract liabilities do not include a significant financing component given the short duration between order initiation and order fulfillment within each of our segments. Refer to Note 9 "Business Segments" for disaggregated revenue disclosures.

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, 2022.

The effective tax rate for each of the periods reported differs from the U.S. statutory rate due primarily to variation in contribution to consolidated pre-tax income from each jurisdiction for the respective periods, differences between the U.S. and foreign tax rates (which range from 20% to 35%) on earnings that have been permanently reinvested and changes to valuation allowances on our deferred tax assets.

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 operations and their associated 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;~~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 ~~consolidated financial statements~~Condensed Consolidated Financial Statements from such a position are measured as the largest benefit that is more likely than not ~~of being~~to be realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense.

In the U.S., tax audits for the years 2012 through 2015 were closed during the second quarter 2017, and no adjustments to the Company's tax provisions were proposed. In Germany, tax audits are currently in progress for the years 2011 through 2014. Our tax provisions reflect our best estimate of state, local, federal, and foreign taxes. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with our expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

~~Unvested awards of share-based payments~~In periods with ~~rights to receive dividends or dividend equivalents are considered participating securities for purposes of calculating~~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 are considered participating securities in periods of net income as they receive non-forfeitable rights to dividends as common stock. Restricted stock awards do not participate in net losses.

Basic EPS is calculated by dividing net income (loss) attributable to the Company’s stockholders after adjustment of redeemable noncontrolling interest by the weighted-average number of common shares outstanding during the period. Net income (loss) available to common shareholders of the Company includes any adjustment to the redeemable noncontrolling interest value as of the end of the period presented. Refer to the "Redeemable noncontrolling interest" section above for further discussion of the calculation of the adjustment of the redeemable noncontrolling interest. Diluted EPS adjusts basic EPS for the effects of restricted stock awards, restricted stock units, performance share units and other potentially dilutive financial instruments (dilutive securities), only in the periods in which ~~we have net income and require the use~~such effect is dilutive. The effect of the ~~two class~~dilutive securities is reflected in diluted EPS by application of the more dilutive of (1) the treasury stock method or (2) the two-class method. For the 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,
	2023		2022		2023		2022
Net income attributable to DMC Global Inc. stockholders, as reported	$	8,883	$	6,717	$	23,495	$	8,981
Adjustment of redeemable noncontrolling interest	(1,263)		2,256		(2,289)		(4,996)

Less: Undistributed net income available to participating securities	(118)		(136)		(329)		(61)
Numerator for basic net income per share:	7,502		8,837		20,877		3,924
Add: Undistributed net income allocated to participating securities	118		136		329		61
Less: Undistributed net income reallocated to participating securities	(117)		(136)		(328)		(61)
Numerator for diluted net income per share:	$	7,503	$	8,837	$	20,878	$	3,924
Denominator:
Weighted average shares outstanding for basic net income per share	19,543,251		19,381,489		19,492,212		19,352,638
Effect of dilutive securities (1)	53,324		305		48,766		4,695
Weighted average shares outstanding for diluted net income per share	19,596,575		19,381,794		19,540,978		19,357,333
Net income per share attributable to DMC Global Inc. stockholders
Basic	$	0.38	$	0.46	$	1.07	$	0.20
Diluted	$	0.38	$	0.46	$	1.07	$	0.20

(1) For the three and nine months ended September 30, 2023, 3,239 and 9,447 shares, respectively, have been excluded as their effect would have been anti-dilutive.

Deferred Compensation Plan

The Company maintains a Non-Qualified Deferred Compensation Plan (the “Plan”) as part of its overall compensation package for ~~calculating EPS. Under this method,~~certain employees. Participants are eligible to defer a portion of ~~net income is allocated~~their annual salary, their annual incentive bonus, and their equity awards through the Plan on a tax-deferred basis. Deferrals into the Plan are not matched or subsidized by the Company, nor are they eligible for above-market or preferential earnings.

The Plan provides for deferred compensation obligations to ~~these participating securities and therefore is excluded from the calculation~~be settled either by delivery of ~~EPS allocated to~~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 can elect to diversify contributions of equity awards into other investment options available to Plan participants. Once diversified, such contributions will be settled by delivery of cash.

The Company has established a grantor trust commonly known as ~~shown~~a “rabbi trust” and contributed certain assets to satisfy the future obligations to participants in the ~~table below.~~Plan. These assets are subject to potential claims of the Company’s general creditors. The assets held in the trust include unvested restricted stock awards (“RSAs”), vested company stock awards, company-owned life insurance (“COLI”) on certain current and former employees, and money market and mutual funds. Unvested RSAs and 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. COLI is accounted for at the cash surrender value while money market and mutual funds held by the trust are accounted for at fair value.

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 amount included within “Prepaid expenses and other” and “Other current liabilities” pertains to scheduled distributions per the terms of the Plan to our former Chief Executive Officer (“CEO”) that will occur within twelve months of September 30, 2023. Refer to Note 12 for additional information regarding the CEO transition.

~~Computation and reconciliation of earnings per share of common stock are as follows:~~


	Balance Sheet location	September 30, 2023		December 31, 2022
Deferred compensation assets	Prepaid expenses and other	$	1,428	$	—
Deferred compensation assets	Other assets	8,087		13,566
Deferred compensation obligations	Other current liabilities	1,428		—
Deferred compensation obligations	Other long-term liabilities	11,673		15,292

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Numerator:
Net loss $ (14,064 ) $ (3,136 ) $ (16,892 ) $ (4,316 )
Less income allocated to RSAs —
—
—
—
Net income (loss) allocated to common stock for EPS calculation $ (14,064 ) $ (3,136 ) $ (16,892 ) $ (4,316 )

Denominator:
Weighted average common shares outstanding - basic 14,368,225
14,195,921
14,333,452
14,105,594
Dilutive stock-based compensation plans —
—
—
—
Weighted average common shares outstanding - diluted 14,368,225
14,195,921
14,333,452
14,105,594

Net income (loss) allocated to common stock for EPS calculation:
Basic $ (0.98 ) $ (0.22 ) $ (1.18 ) $ (0.31 )
Diluted $ (0.98 ) $ (0.22 ) $ (1.18 ) $ (0.31 )

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer 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, ~~trade~~ accounts receivable, accounts payable, and ~~payables,~~ accrued expenses ~~and lines of credit~~ approximate their fair value. Our marketable securities are valued using quoted prices in active markets that are accessible as of the measurement date. The carrying value of our revolving loans and term loan under our credit facility, when outstanding, approximate their fair value because of the variable interest rate associated with those instruments, which reset each month at market interest rates. All of these account balances are considered Level 1 assets and liabilities.

Our foreign currency forward contracts are valued using quoted market prices or are determined using a yield curve model based on current market rates. As a result, we ~~intend to~~ classify these ~~investments~~instruments as Level 2 in the fair value hierarchy. Money market funds and mutual funds of $3,175 as of September 30, 2023 and $8,444 as of December 31, 2022 held to satisfy future deferred compensation obligations are valued based upon the market values of underlying securities and are classified as Level 2 assets in the fair value hierarchy.

We ~~did not~~ did not hold any Level 3 assets or liabilities as of September 30, ~~2017~~2023 or December 31, ~~2016. The goodwill impairment charge recorded in the third quarter of 2017 was calculated using Level 3 inputs.~~2022.

~~Recently Adopted Accounting Standards~~

In July 2015, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") to change the measurement of inventory from lower of cost or market to lower of cost and net realizable value. This pronouncement is effective for reporting periods beginning after December 15, 2016, and the Company has adopted it as of the first quarter of 2017. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” to simplify the method of measuring a goodwill impairment charge in the event a reporting unit’s carrying amount exceeds its fair value. In those circumstances, the new standard requires the Company to recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. The Company adopted this standard during the third quarter of 2017 and applied it in the test for goodwill impairment described in Note 4.

Recent Accounting Pronouncements

In February 2016, the FASB issued an ASU which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. This ASU will be effective beginning in the first quarter of 2019. Early adoption is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In May 2014, the FASB issued an ASU to clarify the principles of recognizing revenue and to develop a common revenue standard and disclosure requirements for U.S. GAAP and IFRS. The pronouncement is effective for reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The standard can be adopted using either of two methods: (1) retrospective application to each prior reporting period presented with the option to elect certain practical expedients, as defined within the standard ("full retrospective") or (2) retrospective application with the cumulative effect of adoption recognized at the date of initial application and providing certain additional disclosures, as defined within the standard ("modified retrospective"). Management currently plans to adopt the ASU for the quarter ended March 31, 2018, as required by the standard, and plans to use the modified retrospective approach.

Currently, using internal resources, management is analyzing contracts from the NobelClad and DynaEnergetics segments to determine the technical accounting conclusions and the impact on business processes and systems of the new revenue standard. In our NobelClad business, contracts are often for unique projects, but the vast majority of contracts contain standard terms and conditions. In our DynaEnergetics business, we sell a range of products to a wide variety of customers, but the contracts also often contain similar terms and conditions. We have ~~reviewed contracts representing a majority of NobelClad's~~considered all recent accounting pronouncements issued, but not yet effective, and ~~DynaEnergetics' revenue for the year ended December 31, 2016 and have preliminarily concluded that applying the new standard~~we do not expect any to ~~those contracts would not~~ have a material ~~impact~~effect on ~~our financial statements.~~the Company’s Condensed Consolidated Financial Statements.

~~The Company is continuing to evaluate the impacts of our pending adoption, and our preliminary assessments are subject to change.~~

Inventories are stated at the lower of cost (first-in, first-out) ~~and~~or net realizable value. ~~Cost~~Significant cost elements included in inventory are material, labor, freight, subcontract costs, and manufacturing overhead. As necessary, we ~~record~~write down inventory to its net realizable value by recording provisions ~~and maintain reserves~~ for excess, slow moving and obsolete inventory. ~~To determine reserve amounts, we~~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 ~~consist~~consisted of the following at September 30, ~~2017~~ ~~and~~ 2023:


	Arcadia		DynaEnergetics		NobelClad		DMC Global Inc.
Raw materials	$	8,761	$	25,215	$	9,675	$	43,651
Work-in-process	9,798		32,776		14,581		57,155
Finished goods	56,665		28,012		—		84,677
Supplies	—		—		294		294
Total inventories	$	75,224	$	86,003	$	24,550	$	185,777

Inventories consisted of the following at December 31, ~~2016~~ ~~and include reserves of $2,985 and $4,226, respectively:~~2022:


	Arcadia		DynaEnergetics		NobelClad		DMC Global Inc.
Raw materials	$	11,099	$	23,701	$	8,926	$	43,726
Work-in-process	11,468		21,198		7,587		40,253
Finished goods	55,074		16,802		456		72,332
Supplies	—		—		279		279
Total inventories	$	77,641	$	61,701	$	17,248	$	156,590

~~As of December 31, 2016, all of the goodwill was recorded within our NobelClad segment. The changes to the carrying amount of goodwill during the period are summarized below:~~

As required under ASC 350, “Goodwill and Other Intangible Assets”, we routinely review the carrying value of our net assets, including goodwill, to determine if any impairment has occurred. A quantitative assessment was conducted at June 30, 2017, at which time, based on existing conditions and management’s outlook, we determined there was no impairment. In the third quarter of 2017, activity in NobelClad’s primary end markets slowed considerably. NobelClad experienced a significant decline in its small size core maintenance bookings within the oil and gas industry. Additionally, certain large petrochemical projects previously forecasted to ship in the next twelve months were delayed, and uncertainty exists as to the ultimate timing of booking and shipping these potential orders. As a result, we determined that a potential indicator of goodwill impairment existed during the third quarter of 2017. We utilized an income approach (discounted cash flow analysis) to determine the fair value of the NobelClad reporting unit and concluded that our long-term forecasts were not materializing and needed to be revised downward. We believe the discounted cash flow approach is the most reliable indicator of fair value. The key assumptions used in the discounted cash flow analysis included, among other measures, expected future sales, operating income, working capital and capital expenditures. The discount rate was determined using a peer-based, risk-adjusted weighted average cost of capital.

We determined that the estimated fair value of the NobelClad reporting unit was less than its carrying value primarily due to the factors described above and their related impact on expected future cash flows. During the third quarter, we adopted ASU 2017-04 which amends and simplifies how an entity measures a goodwill impairment loss by eliminating step two from the goodwill impairment test. As the carrying value of the NobelClad reporting unit exceeded the fair value by more than the book value of goodwill, we recorded an impairment charge of $17,584 to fully impair the goodwill related to this reporting unit as of September 30, 2017.

For purchased intangible assets, we performed an assessment of the recoverability in accordance with the general valuation requirements set forth under ASC 360, “Accounting for the Impairment of Long-Lived Assets.” The result of this assessment indicated that no impairment existed for purchased intangible assets.

5. PURCHASED INTANGIBLE ASSETS

~~The following table presents details of our~~Our purchased intangible assets ~~other than goodwill, as~~consisted of the following at September 30, ~~2017~~:

~~The following table presents details of our~~Our purchased intangible assets ~~other than goodwill, as~~consisted of the following at December 31, ~~2016~~:

The change in the gross value of our unamortized purchased intangible assets at September 30, 2023 from December 31, ~~2016~~ to ~~September 30, 2017~~2022 was due to foreign currency translation and an adjustment due to recognition of tax benefit of tax amortization previously applied to certain goodwill related to the DynaEnergetics reporting unit. After the goodwill was written off at December 31, 2015, the tax amortization reduces other noncurrent intangible assets related to the historical acquisition.translation.

~~On occasion,~~At times, we require customers to make advance payments prior to the shipment of ~~goods in order~~their orders to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. Contract liabilities were as follows for the periods presented:


	September 30, 2023		December 31, 2022
Arcadia	$	16,564	$	27,634
NobelClad	10,003		3,661
DynaEnergetics	1,990		785
Total contract liabilities	$	28,557	$	32,080

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.

The Company leases real properties for use in manufacturing and as administrative and sales offices, and leases automobiles and office equipment. The Company determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Company is the lessee, leases are classified as either finance or operating. Right-of-use (“ROU”) assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the implicit rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term within the Condensed Consolidated Statements of Operations. Lease and non-lease components within the Company’s lease agreements are accounted for together. Variable lease payments are recognized in the period in which the obligation is incurred. The Company has no leases in which the Company is the lessor.

Nearly all of the Company’s leasing arrangements are classified as operating leases. ROU asset and lease liability balances were as follows for the periods presented:


	September 30, 2023		December 31, 2022
ROU asset	$	44,661	$	48,470

Current lease liability	7,290		7,041
Long-term lease liability	39,288		43,001
Total lease liability	$	46,578	$	50,042

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.

Arcadia leases certain office, manufacturing, distribution and warehouse facilities from entities affiliated with the redeemable noncontrolling interest holder and former president of Arcadia. There were eight related party leases in effect as of September 30, 2023, with expiration dates ranging from calendar years 2023 to 2026, excluding any renewal options. As of September 30, ~~2017~~2023, the total ROU asset and ~~December 31, 2016, customer advances totaled~~ ~~$2,772~~related lease liability recognized for related party leases was $26,291 and ~~$2,619~~,$27,062, respectively.

For the three months ended September 30, 2023 and 2022, operating lease expense was $3,349 and $2,872, respectively. For the nine months ended September 30, 2023 and 2022, operating lease expense was $9,504 and $8,413, respectively. Related party lease expense for the three and nine months ended September 30, 2023 and 2022 was $1,156 and $3,469, respectively, in each period and ~~originated from several customers.~~is included in total operating lease expense. Short term and variable lease costs were not significant for any period presented.

~~Lines of credit~~Outstanding borrowings consisted of the following at ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016~~:at:


	September 30, 2023		December 31, 2022
Syndicated credit agreement:
U.S. Dollar revolving loan	$	—	$	—
Term loan	121,250		135,000


Commerzbank line of credit	—		—
Outstanding borrowings	121,250		135,000
Less: debt issuance costs	(1,790)		(2,202)
Total debt	119,460		132,798
Less: current portion of long-term debt	(15,000)		(15,000)
Long-term debt	$	104,460	$	117,798

Syndicated Credit Agreement

~~As of~~On December ~~31, 2016,~~23, 2021, we ~~had~~entered into a ~~$75,000~~five-year $200,000 syndicated credit agreement (“credit facility”) ~~that allowed~~which included a $150,000 Term Loan, which is amortizable at 10% of principal per year with a balloon payment for the outstanding balance upon the credit facility maturity date in 2026, and allows for revolving loans of ~~$65,000 in U.S. dollars and $10,000 in alternative currencies as well as a $100,000~~up to $50,000. The credit facility has an accordion feature to increase the commitments ~~in any of the loan classes subject to approval~~ by ~~applicable lenders. The credit facility matures on February 23, 2020.~~

~~On March 6, 2017, we entered into a third amendment of our credit facility which, among other changes, reduced the amount of borrowings available~~$100,000 under the credit facility, increased the maximum debt-to-EBITDA leverage ratio for the first, second, and third quarters of 2017, and also waived the applicability of the minimum debt service coverage ratio for the first,

~~second, and third quarters of 2017, and added~~revolving loan class and/or by adding a ~~minimum EBITDA covenant for those same periods and is inapplicable thereafter. The maturity of the credit facility did not change with the amendment.~~

After the amendment, our credit facility allows for borrowings up to $35,000, consisting of revolving loans of $30,000 in U.S. dollars and $5,000 in alternate currencies as well as a $25,000 accordion feature to increase the commitments in any of theterm loan ~~classes~~ subject to approval by applicable lenders. We ~~also maintain a line of~~entered into the credit facility with a ~~German bank for~~syndicate of four banks, with KeyBank, N.A. acting as administrative agent. The credit facility is secured by certain ~~European operations. This line~~assets of ~~credit provides a borrowing capacity of €4,000, of which €2,478 is available after considering outstanding letters of credit.~~DMC including accounts receivable, inventory, and fixed assets, including Arcadia and its subsidiary, as well as guarantees and share pledges by DMC and its subsidiaries.

~~U.S. borrowings~~Borrowings under the ~~amended credit facility~~$150,000 Term Loan and $50,000 revolving loan limit can be in the form of ~~Alternate~~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 ~~(“ABR”~~(Base Rate borrowings are based on the greater of ~~adjusted~~the administrative agent’s Prime ~~rates, adjusted CD rates, or~~rate, an adjusted Federal Funds ~~rates)~~rate or ~~one, two, three, or six month London Interbank Offered~~an adjusted SOFR rate). SOFR loans bear interest at the applicable SOFR rate plus an applicable margin (varying from 1.50% to 3.00%). Base Rate ~~(“LIBOR”) loans. ABR~~ loans bear interest at the defined ~~ABR rate plus an applicable margin and LIBOR loans bear interest at the applicable LIBOR rate plus an applicable margin.~~

Alternative currency borrowings under the amended credit facility can be in Canadian Dollars, Euros, Pounds Sterling and any other currency that is freely transferable and convertible to U.S. Dollars. Alternative currency borrowings denominated in Canadian Dollars shall be comprised of Canadian Dealer Offered Rate (“CDOR”) Loans or Canadian Prime Loans, at our option, and bear interest at the CDOR rate plus applicable margin or the applicable Canadian PrimeBase Rate plus an applicable margin ~~respectively. Alternative currency borrowings denominated in Euros shall be comprised~~(varying from 0.50% to 2.00%). As of ~~Euro Interbank Offered Rate (“EURIBOR”) loans and bear interest at~~September 30, 2023, no amounts were outstanding on the EURIBOR rate plus an applicable margin. Alternative currency borrowings denominated in any other alternative currency shall be comprised of Eurocurrency loans and bear interest at the LIBOR rate plus an applicable margin.revolver.

~~LIBOR, EURIBOR, and CDOR applicable margins vary from 1.75% to 3.25%, and ABR and Canadian Prime applicable margins vary from 0.75% to 2.25%.~~

~~Loan Covenants and Restrictions~~

~~Our existing loan agreements include~~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; ~~incurrence of~~incurring additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified ~~financial~~ 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 Pro Forma 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 from the quarter ended June 30, 2023 and thereafter.

The debt service coverage ratio is defined in the credit facility as the ratio of Consolidated Pro Forma 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 1.35 to 1.0.

As of September 30, ~~2017,~~2023, we were in compliance with all financial covenants and other provisions of our debt agreements.

We also maintain a line of credit with a German bank with a borrowing capacity of €7,000 for certain European operations. This line of credit is also used to issue bank guarantees to customers to secure advance payments made by them. As of September 30, 2023 and December 31, 2022, we had no outstanding borrowings under this line of credit and bank guarantees of €2,491 and €2,221, respectively, were secured by the line of credit. The line of credit has open-ended terms and can be canceled by the bank at any time.

Included in “Long-term debt” are deferred debt issuance costs of $1,790 and $2,202 as of September 30, 2023 and December 31, 2022, respectively. Deferred debt issuance costs are being amortized over the remaining term of the credit facility, which expires on December 23, 2026.

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 from each jurisdiction for the respective periods, differences between the U.S. and foreign tax rates (which range from 20% to 33%), permanent differences between book and taxable income, and income or loss attributable to the redeemable noncontrolling interest holder.

Arcadia 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 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 the 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. During the three and nine months ended September 30, 2023 and September 30, 2022, we did not record any adjustments to previously established valuation allowances, except for corresponding adjustments related to changes in deferred tax asset balances. These adjustments had no impact on the Condensed Consolidated Statements of Operations. The Company will continue to monitor the realizability of deferred tax assets and the need for valuation allowances and will record adjustments in the periods in which facts support such changes.

The Tax Cuts and Jobs Act (“TCJA”) provides that foreign earnings generally can be repatriated to the U.S. without federal tax consequence. We have assessed the assertion that cumulative earnings by our foreign subsidiaries are indefinitely reinvested. We continue to permanently reinvest the earnings of our international subsidiaries and therefore we do not provide for U.S. income taxes or withholding taxes that could result from the distribution of those earnings to the U.S. parent. If any such earnings were ultimately distributed to the U.S. in the form of dividends or otherwise, or if the shares of our international subsidiaries were sold or transferred, we could be subject to additional U.S. federal and state income taxes. Due to the multiple avenues in which earnings can be repatriated, and because a large portion of these earnings are not liquid, it is not practical to estimate the amount of additional taxes that might be payable on these amounts of undistributed foreign income.

Our business is organized into ~~two~~three segments: ~~NobelClad~~Arcadia, DynaEnergetics and ~~DynaEnergetics.~~NobelClad. In December 2021, DMC acquired a 60% controlling interest in Arcadia. Arcadia supplies architectural building products, including exterior and interior framing systems, curtain walls, windows, doors, and interior partitions to the commercial construction market; it also supplies customized windows and doors to the high-end residential construction market. DynaEnergetics designs, manufactures and distributes highly engineered products utilized by the global oil and gas industry principally for the perforation of oil and gas wells. NobelClad is a ~~global~~ leader in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment, ~~and~~as well as specialized transition ~~joints. DynaEnergetics designs, manufactures~~joints for use in construction of commuter rail cars, ships, and ~~distributes products utilized by the global oil and~~liquified natural gas ~~industry principally for the perforation of oil and gas wells.~~(LNG) processing equipment.

The accounting policies of all of the segments are the same as those described in the summary of significant accounting policies included herein and in our Annual Report on Form 10-K for the year ended December 31, 2016.

Our reportable segments are separately managed, strategic business units that offer different products and ~~services.~~services, and each segment has separate financial information available that is evaluated regularly by the Chief Operating Decision Maker ("CODM") in allocating resources and assessing performance. Each segment’s products are marketed to different customer types and require different manufacturing processes and technologies.

Segment information is as follows:


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Net sales:
Arcadia	$	71,455	$	80,697	$	230,951	$	225,127
DynaEnergetics	72,998		70,372		239,720		186,776
NobelClad	27,694		23,396		74,481		67,109
Net sales	$	172,147	$	174,465	$	545,152	$	479,012


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Income (loss) before income taxes:
Arcadia	$	6,476	$	3,742	$	19,189	$	3,521
DynaEnergetics	10,871		11,978		41,772		26,585
NobelClad	5,232		2,505		12,560		5,690
Segment operating income	22,579		18,225		73,521		35,796

Unallocated corporate expenses	(3,382)		(2,939)		(14,283)		(10,490)
Unallocated stock-based compensation*	(1,495)		(1,885)		(7,319)		(5,883)
Other income (expense), net	302		120		(337)		(35)
Interest expense, net	(2,392)		(1,771)		(7,205)		(4,058)
Income before income taxes	$	15,612	$	11,750	$	44,377	$	15,330


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
Depreciation and amortization:
Arcadia	$	6,621	$	7,966	$	19,631	$	34,818
DynaEnergetics	1,697		1,957		5,212		5,908
NobelClad	712		899		2,152		2,725
Segment depreciation and amortization	9,030		10,822		26,995		43,451
Corporate and other	97		104		300		281
Consolidated depreciation and amortization	$	9,127	$	10,926	$	27,295	$	43,732


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
West	$	58,572	$	63,281	$	183,829	176,288
South	6,869		12,139		22,261		27,362
Northeast	4,001		2,958		17,991		11,880
Midwest	2,013		2,319		6,870		9,597
Total Arcadia	$	71,455	$	80,697	$	230,951	$	225,127


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
United States	$	56,739	$	55,999	$	189,104	$	146,297
Canada	4,975		4,341		17,883		14,453
Oman	2,414		704		5,548		2,695

Kuwait	1,342		193		3,492		1,272
Indonesia	630		1,051		2,318		1,903



United Arab Emirates	548		308		4,506		1,524

Rest of the world(1)	6,350		7,776		16,869		18,632
Total DynaEnergetics	$	72,998	$	70,372	$	239,720	$	186,776

(1) Rest of the world does not include any individual country comprising sales greater than 5% of total DynaEnergetics revenue for the periods presented.


	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022
United States	$	13,279	$	9,120	$	33,643	$	29,055
South Korea	3,691		672		4,294		1,510
Canada	2,334		3,161		6,048		6,952
Germany	1,579		2,055		4,393		3,215
Saudi Arabia	1,106		—		3,104		1,995
France	1,021		472		2,101		1,625
China	743		1,100		3,810		3,467
United Arab Emirates	607		1,003		3,273		2,705
Australia	534		844		677		1,499

Belgium	463		165		1,937		507
Sweden	353		1,096		871		2,179


Netherlands	276		357		1,038		1,464
Brazil	88		1,227		1,834		1,240


Rest of the world (1)	1,620		2,124		7,458		9,696
Total NobelClad	$	27,694	$	23,396	$	74,481	$	67,109

(1) Rest of the world does not include any individual country comprising sales greater than 5% of total NobelClad revenue for the periods presented.

During the three and nine months ended September 30, ~~2017~~2023, one DynaEnergetics customer accounted for approximately 15% and ~~2016~~12%, respectively, of consolidated net sales. The same DynaEnergetics customer accounted for approximately 20% and 15% of consolidated accounts receivable as ~~follows:~~

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Net sales:
NobelClad $ 16,841
$ 16,915
$ 54,145
$ 68,374
DynaEnergetics 35,320
19,638
84,169
50,028

Consolidated net sales $ 52,161
$ 36,553
$ 138,314
$ 118,402

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Operating income (loss)
NobelClad $ (17,030 ) $ 701
$ (14,313 ) $ 6,340
DynaEnergetics 6,867
(977 ) 8,908
(2,959 )

Segment operating income (loss) (10,163 ) (276 ) (5,405 ) 3,381

Unallocated corporate expenses (1,543 ) (1,614 ) (5,240 ) (5,057 )
Stock-based compensation (743 ) (552 ) (2,125 ) (1,673 )
Other income (expense), net (436 ) (157 ) (965 ) 178
Interest expense (367 ) (265 ) (1,203 ) (826 )
Interest income —
—
2
2

Loss before income taxes $ (13,252 ) $ (2,864 ) $ (14,936 ) $ (3,995 )

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Depreciation and amortization:
NobelClad $ 932
$ 1,006
$ 2,927
$ 3,000
DynaEnergetics 1,757
1,763
5,137
5,047

Segment depreciation and amortization $ 2,689
$ 2,769
$ 8,064
$ 8,047

September 30, 2023 and December 31, 2022, respectively. During the three and nine months ended September 30, ~~2017 and 2016,~~2022, no ~~one~~single customer accounted for ~~more~~greater than 10% of ~~total~~consolidated net sales.

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 ~~the euro to the Russian ruble,~~ and, to a lesser extent, other currencies, arising from ~~inter-company~~intercompany and ~~third party~~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. ~~During the third quarter of 2017, we began using~~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 the forward contracts are recognized in ~~"Other~~“Other income (expense), ~~net"~~net” within our Condensed Consolidated Statements of Operations.

We execute derivatives with a specialized foreign exchange brokerage ~~firm.~~firm as well as other large financial institutions. The primary credit risk inherent in derivative agreements ~~represents~~is the possibility that a loss may occur from the nonperformance of a counterparty to the ~~agreements, and thus we~~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 agreements but will take action if doubt arises regarding the ~~counterparties'~~counterparties’ ability to perform.

As of September 30, ~~2017,~~2023 and December 31, 2022, the net notional amounts of the forward contracts the Company held ~~to purchase currencies~~ were ~~$19,297,~~$32,333 and $21,907, respectively. At September 30, 2023 and December 31, 2022, the ~~notional amounts~~fair value of outstanding forward contracts ~~the Company held to sell currencies were $2,910. The fair values of outstanding foreign currency forward contracts were not material at September 30, 2017.~~was $0.

The following table ~~presents~~reflects the location and amount of net gains (losses) from hedging activities for the ~~three~~periods presented. These hedging net gains (losses) offset foreign currency gains and ~~nine months ended September 30, 2017 and 2016:~~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	2023		2022		2023		2022
Foreign currency contracts	Other income (expense), net	$	(1,079)	$	(637)	$	(901)	$	(789)

~~10.~~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.

~~Anti-dumping~~Legal Proceedings

From time to time, we may become involved in various lawsuits and ~~Countervailing Duties~~

In June 2015, U.S. Customs and Border Protection (“U.S. Customs”) sent us a Notice of Action that proposed to classify certain of our imports as subject to anti-dumping duties pursuant to a 2010 anti-dumping duty (“AD”) order on Oil Country Tubular Goods (“OCTG”) from China. A companion countervailing duty (“CVD”) order on the same product is in effect as well. The Notice of Action covered one entry of certain raw material steel mechanical tubing made in China and imported into the U.S. from Canada by our DynaEnergetics segment during 2015 for use in manufacturing perforating guns.

In July 2015, we sent a response to U.S. Customs outlining the reasons our mechanical tubing imports do not fall within the scope of the AD order on OCTG from China and should not be subject to anti-dumping duties. U.S. Customs proposed to take similar action with respect to other entries of this product and requested an approximately $1,100 cash deposit or bond for AD/CVD duties.

In August 2015, we posted the bond of approximately $1,100 to U.S. Customs. Subsequently, U.S. Customs declined to conclude on the Company's assertion that the mechanical tubing the Company has been importing is not within the scope of the AD order on OCTG from China. As a result, on September 25, 2015 the Company filed a request for a scope ruling with the U.S. Department of Commerce ("Commerce Department").

~~On February 15, 2016, the Company received the Commerce Department’s scope ruling,~~legal proceedings which ~~determined certain imports, primarily used for gun carrier tubing, are included~~arise in the ~~scope~~ordinary course of ~~the AD/CVD orders on OCTG from China and thus are subject to AD/CVD duties.~~

On March 11, 2016, the Company filed an appeal with the U.S. Court of International Trade (“CIT”) related to the Commerce Department’s scope ruling. On February 7, 2017, the CIT remanded the scope ruling to the Commerce Department to reconsider its determination. The Commerce Department filed its remand determination with the CIT on June 7, 2017 continuing to find that the Company's imports at issue are within the scope of the AD/CVD orders on OCTG from China. This determinationbusiness. However, litigation is subject to ~~the CIT's review~~inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the ~~ongoing appeal,~~aggregate, a material adverse effect on our business, financial condition or operating results except as set forth below:

Wage and Hour Matters

Felipe v. Arcadia, Inc. and One Stop Employment Services, Inc. (“One Stop”). This complaint was filed on October 22, 2021 in Los Angeles Superior Court and purports to allege a class action on behalf of all non-exempt California employees who worked on behalf of One Stop or Arcadia at any time during the four years preceding the date of the complaint. One Stop is a staffing agency which ~~is continuing.~~

~~On December 27, 2016, we received notice from U.S. Customs~~provides temporary workers, including to Arcadia. The complaint states claims under California’s labor laws and under its general Unfair Business Practices Act, California Business & Professions Code section 17200. The plaintiff has subsequently dismissed the class action claims without prejudice, acknowledging that ~~it may pursue penalties against us related to the AD/CVD issue and demanding tender of alleged loss of AD/CVD duties in an amount of $3,049, which was covered by our reserve. We~~Arcadia’s arbitration agreement likely bars such class claims. The plaintiff also filed a ~~response to~~separate action under California’s Private Attorneys General Act (“PAGA”) alleging essentially the ~~notice on February 6, 2017 asserting our position~~same wage and hour violations. This action included other Arcadia employees. The California Supreme Court has recently ruled that ~~any decision to pursue penalties would be premature in light of~~ the Remand Order and that penalties would not be appropriate under the applicable legal standards. On February 16, 2017, we received notice that U.S. Customs was seeking penalties in the amount of $14,783. U.S. Customs also reasserted its demand for tender of alleged loss of AD/CVD duties in the amount of $3,049. We tendered $3,049 in AD amounts (“Tendered Amounts”) on March 6, 2017 into a suspense account pending ultimate resolution of the AD/CVD case. We believe that this penalty assessment is premature and patently unreasonable in the face of the ongoing CIT appeal and that penaltiesrepresentative PAGA claims are not ~~appropriate under applicable legal standards. Further, even if penalties~~barred by the arbitration agreement. The plaintiff has commenced arbitration on individual claims, with arbitration set for 2024. In the meantime, the PAGA representative claims are ~~found to be justified, we~~

~~believe the amount of penalties asserted by U.S. Customs is unreasonable~~stayed and subject to challenge on various grounds. We submitted a petition for relief and mitigation of penalties on May 17, 2017 asserting these and other points and seeking a stay of the penalty proceedings pending ultimate resolution of the CIT appeal and any further appeals. We are awaiting a response from U.S. Customs and U.S. Customs Headquarters on this petition.

For the nine months ended September 30, 2017, the Company recorded $84 of interest on its reserve for AD/CVD duties, bringing the total reserved amount related to AD/CVD duties as of September 30, 2017 to $3,585. The Tendered Amounts were applied to reduce the reserve. The Companylikely will continue to incur legal defense costs and could also be subject to additional interest and penalties. Accruals for the potential penalties discussed above are not reflected in our financial statements as of September 30, 2017 as we do not believe they are probable at this time.

~~Patent and Trademark Infringement~~

On September 22, 2015, GEODynamics, Inc., a US-based oil and gas perforating equipment manufacturer based in Fort Worth, TX, filed a patent and trademark infringement action against DynaEnergetics US, Inc., (“DynaEnergetics”), a wholly owned subsidiary of DMC, in the United States District Court for the Eastern District of Texas (“District Court”) regarding alleged infringement of US Patent No. 9,080,431 granted on July 14, 2015 (the “431 patent”) and a related US trademark for REACTIVE, alleging that DynaEnergetics’ US sales of DPEX^TM shaped charges infringe the ‘431 patent and the trademark. The 431 case went to trial in late March 2017, and on March 30, 2017, the jury found in favor of DynaEnergetics on all counts. A bench trial on related matters, including the trademark infringement action occurred on April 20, 2017, and the Court ordered cancellation of GEODynamics' REACTIVE trademark.

On July 1, 2016, GEODynamics filed a second patent infringement action against DynaEnergetics in District Court alleging infringement of US Patent No. 8,544,563 (the “563 patent”), also based on DynaEnergetics’ US sales of DPEX shaped charges. DynaEnergetics denies validity and infringement of the 563 patent and plans to vigorously defend against this lawsuit. On September 20, 2016, DynaEnergetics filed an Inter Parties Review (IPR) against the 563 patent at the U.S. Patent Trial and Appeal Board (“PTAB”), requesting invalidation of the 563 patent. On March 17, 2017, DynaEnergetics' IPR request was instituted by the PTAB, and a decision is expected in early 2018. Trial on the 563 patent has beenremain stayed pending resolution of the ~~IPR.~~

On April 28, 2017, GEODynamics filed a third patent infringement action against DynaEnergetics in District Court alleging infringement of U.S. Patent No. 8,220,394 (the “394 patent”), based on DynaEnergetics' sales of its DPEX and HaloFrac® shaped charges. DynaEnergetics denies validity and infringementindividual arbitration claims or completion of the ~~394 patent and plans~~settlement in principle described below.

Mayorga v. Arcadia, Inc. This complaint was filed on November 15, 2021 in Los Angeles Superior Court. It purported to ~~vigorously defend against this lawsuit. On June 9, 2017, DynaEnergetics filed~~allege a ~~motion~~class action on behalf of all of the Company’s non-exempt California employees who worked at the Company within four years before the date the complaint was filed. It asserts claims substantially similar to ~~dismiss for improper venue, or~~those asserted in the ~~alternative~~Felipe case but does not include One Stop as a defendant. The plaintiff amended his complaint to ~~change venue,~~delete class action claims and any individual non-PAGA claims. Accordingly, plaintiff’s complaint is now limited to PAGA collective action claims. The plaintiff has however commenced arbitration on a solely individual basis of his wage and hour claims, and an arbitrator has been appointed to adjudicate those claims. The remaining Mayorga PAGA representative claims have now been assigned to the ~~District Court’s decision is pending. On August 28, 2017, DynaEnergetics filed an IPR against~~same judge as the ~~394 patent at the PTAB, requesting invalidation~~Felipe case. As in Felipe, those PAGA representative claims are currently stayed and will likely remain stayed until completion of the ~~394 patent.~~

On August 21, 2017, GEODynamics filed a patent infringement action against DynaEnergetics GmbH & Co. KG and DynaEnergetics Beteiligungs GmbH, both wholly owned subsidiaries of DMC (collectively, “DynaEnergetics EU”),settlement in the Regional Court of Düsseldorf, Germany, alleging infringement of European patent EP 1 671 013 B1 granted on June 29, 2011, a patent related to the 394 patent (the “EP 013 patent”), based on the manufacturing, sale and marketing of DPEX shaped charges in Germany. DynaEnergetics EU denies validity and infringementprinciple or of the ~~EP 013 patent~~individual arbitration if the settlement in principle is not consummated.

We have mediated the Mayorga claims, and ~~plans~~as a result have reached a settlement in principle. Arcadia has agreed to ~~vigorously defend against this lawsuit.~~

~~We do not believe~~pay $375 of a total $600 settlement amount to resolve its portion of all PAGA claims in both the Mayorga and Felipe actions. As currently proposed, the parties have agreed in principle that the ~~563 patent,~~settlement will include the ~~394 patent, the EP 013 patent or infringement~~individual claims based on the patents are valid, and we do not believe it is probable that we will incur a material loss on the 563 matter, the 394 matter or the EP 013 matter. However, if it is determined that the patents are valid and that DynaEnergetics or DynaEnergetics EU, as applicable, has infringed them, it is reasonably possible that our financial statements could be materially affected. We are not able to provide a reasonable estimate of the ~~range of loss,~~plaintiff in Felipe. The settlement will become final only if the parties reach agreement on a final written document containing all settlement terms, and ~~we have not accrued for any~~only if such ~~losses. Such an evaluation includes, among other things, a determination of~~settlement is approved by the total number of infringing sales in the United States or infringing products manufactured in Germany, as applicable, what a reasonable royalty, if any, might be under the circumstances; or, alternatively, the scope of damages and the relevant period for which damages would apply, if any. court. There is no guarantee either condition will occur.

~~11. RESTRUCTURING~~

~~There was no restructuring activity in the third quarter of 2017.~~ In the second quarter of 2017, DynaEnergetics announced the closure of its operations in Kazakhstan after legislative changes increased our costs to do business while the overall sales in Kazakhstan were not significant to our results. During the quarter, we recorded severance expense, wrote off remaining receivables,

prepaid assets, and inventory, recorded an asset impairment to mark the fixed assets down to their salable value, and recorded to the statement of operations foreign exchange losses that had previously been recorded to the balance sheet through currency translation adjustments, due to the substantial liquidation of the entity. In the second quarter of 2016, DynaEnergetics reduced headcount ~~in Troisdorf, Germany and Austin, Texas.~~

Total restructuring and impairment charges incurred for these programs are as follows and are reported in the “restructuring expenses” line item in our Condensed Consolidated Statement of Operations:

Nine months ended September 30, 2017
Severance Asset Impairment Other Exit Costs Total
DynaEnergetics $ 20
$ 143
$ 295
$ 458

Total $ 20
$ 143
$ 295
$ 458

Three months ended September 30, 2016
Severance Contract Termination Costs Equipment Moving Costs Other Exit Costs Total
DynaEnergetics $ (41 ) $ 370
$ 1
$ 43
$ 373

Total $ (41 ) $ 370
$ 1
$ 43
$ 373

Nine months ended September 30, 2016
Severance Contract Termination Costs Equipment Moving Costs Other Exit Costs Total
DynaEnergetics $ 684
$ 386
$ 15
$ 43
$ 1,128
Corporate 74
—
—
—
74

Total $ 758
$ 386
$ 15
$ 43
$ 1,202

During the nine months ended September 30, ~~2017,~~2023, Arcadia reserved $375 which represents its current estimate of loss to resolve all PAGA claims. Under the ~~changes~~Equity Purchase Agreement, the Company is indemnified for the liability recognized to date related to these matters. Therefore, an offsetting receivable was also recognized such that there was no impact to the ~~restructuring liability associated~~Company’s Condensed Consolidated Statements of Operations during the nine months ended September 30, 2023.

With respect to Felipe’s remaining individual claims and to the extent not resolved through the settlement in principle, Arcadia intends to vigorously defend against the Felipe and Mayorga actions. Due to the nature of these matters and inherent uncertainties, it is not possible to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if any, in this circumstance.

During the first quarter of 2023, the Company and its former CEO entered into a separation agreement pursuant to which the former CEO received certain severance benefits consistent with ~~these programs is summarized below:~~his pre-existing employment agreement with the Company. These severance benefits include 18 months of salary, a lump sum cash payment, and accelerated vesting of outstanding equity awards. During the nine months ended September 30, 2023, the Company recognized $1,621 of severance related expense and $3,040 of stock-based compensation expense related to the accelerated vesting of outstanding equity awards. These expenses were recognized in “General and administrative expenses” in the Condensed Consolidated Statements of Operations.

December 31, 2016 Expense Payments and Other Adjustments September 30, 2017
Severance $ 62
$ 20
$ (62 ) $ 20
Contract termination costs 112
—
(102 ) 10

Total $ 174
$ 20
$ (164 ) $ 30

The following discussion should be read in conjunction with our historical ~~consolidated financial statements~~Consolidated Financial Statements and notes ~~as well as the selected historical consolidated financial data~~ that isare included in our Annual Report filed on Form 10-K for the year ended December 31, ~~2016~~.2022.

Unless stated otherwise, all ~~currency amounts~~dollar figures are presented in thousands ~~of U.S. dollars~~ (000s).

DMC Global Inc. (“DMC”, ~~formerly Dynamic Materials Corporation ("DMC")~~"we", "us", "our", or the "Company") owns and operates ~~two technical product~~Arcadia, DynaEnergetics and ~~process business~~NobelClad, three innovative, asset-light manufacturing businesses that provide differentiated products and engineered solutions to niche segments ~~serving~~of the construction, energy, industrial processing and ~~infrastructure~~transportation markets. ~~These segments, NobelClad and DynaEnergetics, operate globally through an international network~~Each of ~~manufacturing, distribution and sales facilities.~~

~~Our diversified segments each provide~~our businesses provides a unique suite of ~~unique technical~~highly engineered products ~~to niche sectors of the global energy, industrial~~ and ~~infrastructure markets,~~differentiated solutions, and each has established a ~~strong or leading~~leadership position in ~~the~~its respective markets. Our businesses seek to capitalize on their product and service differentiation to grow market share, expand profit margins, increase cash flow and enhance shareholder value.

Our businesses follow clear and compelling strategies and are led by excellent leadership teams that we support with business resources and capital. We take a focused approach to capital allocation and work with our business leaders to identify investments that will advance their operating strategies and generate attractive returns. Our approach helps our portfolio companies grow their core businesses, launch new initiatives, upgrade technologies and systems, expand their markets ~~in which it participates. With an underlying focus on free-cash flow generation, our objective~~and improve their competitive positions. Our culture is to ~~sustain and grow~~foster local innovation versus centralized control. Headquartered in Broomfield, Colorado, DMC trades on Nasdaq under the ~~market share~~symbol “BOOM.”

On December 23, 2021, DMC completed the acquisition of our businesses through increased market penetration, development of new applications, and research and development of new and adjacent products that can be sold across our global network of sales and distribution facilities. We routinely explore acquisitions of related businesses that could strengthen or add to our existing product portfolios, or expand our geographic footprint and market presence. We also seek acquisition opportunities outside our current markets that would complement our existing businesses and enable us to build a stronger and more diverse company.

NobelClad is a global leader in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints. While a large portion60% of the ~~demand for our clad metal~~membership interests in Arcadia Products, LLC, a Colorado limited liability company resulting from the conversion of Arcadia, Inc. (collectively, “Arcadia”). Arcadia supplies architectural building products, ~~is driven by new plant~~including exterior and interior framing systems, curtain walls, windows, doors, and interior partitions to the commercial construction market. Additionally, Arcadia also supplies customized windows and large plant expansion projects, maintenance and retrofit projects at existing chemical processing, petrochemical processing, oil refining, and aluminum smelting facilities also account for a significant portion of total demand. These industries tenddoors to ~~be cyclical in nature and timing of new order inflow remains difficult to predict. We use backlog as a primary means to measure~~ the immediate outlook for our NobelClad business. We define “backlog” at any given point in time as all firm, unfulfilled purchase orders and commitments at that time. Most firm purchase orders and commitments are realized, and we expect to fill most backlog orders within the following 12 months. NobelClad's backlog increased to $31,994 at September 30, 2017 from $31,634 at December 31, 2016. high-end residential construction market.

Cost of products sold for ~~NobelClad~~Arcadia includes the cost of ~~metals~~aluminum, paint, and ~~alloys~~other raw materials used ~~to manufacture clad metal plates, the cost of explosives,~~in manufacturing as well as employee compensation and benefits, ~~freight, outside processing costs,~~manufacturing facility lease expense, depreciation of manufacturing ~~facilities and~~ equipment, ~~manufacturing~~ supplies and other manufacturing overhead expenses.

In the third quarter of 2017, activity in NobelClad’s primary end markets slowed considerably. NobelClad experienced a significant decline in its small size core maintenance bookings within the oil and gas industry. Additionally, certain large petrochemical projects previously forecasted to ship in the next twelve months were delayed, and uncertainty exists as to the ultimate timing of booking and shipping these potential orders. As a result, we determined that a potential indicator of goodwill impairment existed during the third quarter of 2017. We utilized an income approach (discounted cash flow analysis) to determine the fair value of the NobelClad reporting unit and concluded that our long-term forecasts were not materializing and needed to be revised downward. We determined that the estimated fair value of the NobelClad reporting unit was less than its carrying value due primarily to the factors described above and their related impact on expected future cash flows. As the carrying value of the NobelClad reporting unit exceeded the fair value by more than the book value of goodwill, we recorded an impairment charge of $17,584 to fully impair the goodwill related to this reporting unit as of September 30, 2017.

DynaEnergetics designs, manufactures and distributes highly engineered products utilized by the global oil and gas industry principally ~~to perforate~~for the perforation of oil and gas wells. These products are primarily sold to ~~large, mid-sized, and small~~ oilfield service companies in the U.S., Europe, Canada, ~~South America,~~ Africa, the Middle East, ~~Russia,~~ and Asia. ~~DynaEnergetics also sells directly to end-users.~~ The market for perforating products, which are used during the well completion process, generally corresponds with oil and gas exploration and production activity. ~~Exploration activity over the last several years has led to~~Well completion operations are increasingly complex, ~~well completion operations,~~ which in turn has increased the demand for ~~high quality~~intrinsically-safe, reliable and technically advanced perforating ~~products.~~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, depreciation of manufacturing facilities and equipment, ~~manufacturing~~ supplies ~~freight~~ and other manufacturing overhead expenses.

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. 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 timing of new order inflow remains difficult to predict. We use backlog, defined as all unfilled firm purchase orders and commitments at that time, to measure the immediate outlook for our NobelClad business. Most firm purchase orders and commitments are realized and shipped within twelve months. NobelClad's backlog increased to $60,821 at September 30, 2023 from $55,451 at December 31, 2022.

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, depreciation of manufacturing equipment, manufacturing facility lease expense, supplies and other manufacturing overhead expenses.

~~During the three and nine months ended September 30, 2017, the following factors most affected our financial performance:~~

•Arcadia reported sales of $71,455 in the third quarter of 2023, representing a decrease of 11% compared with the third quarter of ~~2016~~2022. The decrease was largely attributable to lower customer pricing in response to reductions in base aluminum metal prices, and increased 32% sequentially versus the second quarter of 2017. Despite a slowdown in the growth of the U.S. onshore rig count, the unconventional well-completions sector remained very active during the third quarter of 2017, reflecting increased completion intensity and longer laterals. This fueled stronglower sales volumes driven by softer demand for ~~DynaEnergetics’ intrinsically safe perforating~~commercial interior products ~~which include~~and brief operational challenges from the ~~DynaSelect detonator and the factory-assembled, performance-assured DynaStage~~implementation of a new ERP system.

•DynaEnergetics’ sales of ~~$16,841~~$72,998 in the third quarter of ~~2017 were essentially flat~~2023 increased 4% compared towith the third quarter of ~~2016~~2022 due to an increase in unit sales of DS perforating systems. International sales increased 13% while North American sales increased 2%. North American sales growth was impacted by a decline in active drilling rigs and ~~decreased 17% from the second quarter~~fracking crews which resulted in lower well completion activity.



Delaware						84-0608431
(State of Incorporation or Organization)						(I.R.S. Employer Identification No.)




Goodwill balance at December 31, 2016	$	16,097
Adjustment due to recognition of tax benefit of tax amortization of certain goodwill	(450		)
Adjustment due to exchange rate differences	1,937
Goodwill impairment	(17,584		)

Goodwill balance at September 30, 2017	$	—



	Gross		Accumulated Amortization			Net
Core technology	$	19,831	$	(9,924	)	$	9,907
Customer relationships	39,028		(34,955		)	4,073
Trademarks / Trade names	2,133		(2,133		)	—

Total intangible assets	$	60,992	$	(47,012	)	$	13,980


	Gross		Accumulated Amortization		Net
Core technology	$	13,920	$	(13,902)	$	18

Customer relationships	244,404		(62,894)		181,510

Trademarks / Trade names	23,894		(4,497)		19,397
Total intangible assets	$	282,218	$	(81,293)	$	200,925



	Gross		Accumulated Amortization			Net
Core technology	$	17,751	$	(8,165	)	$	9,586
Customer relationships	36,088		(29,965		)	6,123
Trademarks / Trade names	1,903		(1,785		)	118

Total intangible assets	$	55,742	$	(39,915	)	$	15,827


Large accelerated filer☐		Accelerated filer ☒

Non-accelerated filer ☐		Smaller reporting company ☐

~~Large accelerated filer~~ o		~~Accelerated filer~~ x

~~Non-accelerated filer~~ o ~~(Do not check if smaller reporting company)~~	~~Smaller reporting company~~ o

	Emerging growth company o ☐



	September 30,			December 31,
	2017			2016
	(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	8,861		$	6,419
Accounts receivable, net of allowance for doubtful accounts of $1,102 and $1,146, respectively	45,443			32,959
Inventory, net	31,489			28,833
Prepaid expenses and other	5,293			5,148

Total current assets	91,086			73,359

PROPERTY, PLANT AND EQUIPMENT	118,752			109,427
Less - accumulated depreciation	(59,167		)	(52,294		)

Property, plant and equipment, net	59,585			57,133

GOODWILL, net	—			16,097

PURCHASED INTANGIBLE ASSETS, net	13,980			15,827

OTHER ASSETS, net	215			139

TOTAL ASSETS	$	164,866		$	162,555



	September 30, 2017		December 31, 2016
Raw materials	$	13,383	$	10,926
Work-in-process	5,757		5,417
Finished goods	12,093		12,146
Supplies	256		344

	$	31,489	$	28,833



	Gain/(Loss) Recognized in Income on Derivatives
		Amount
		Three months ended September 30,					Nine months ended September 30,
Derivatives	Income Statement Location	2017			2016		2017			2016
Foreign currency contracts	Other income (expense), net	$	(193	)	$	—	$	(193	)	$	—
Total gain (loss)		$	(193	)	$	—	$	(193	)	$	—



	Nine months ended September 30, 2017
	Severance		Asset Impairment		Other Exit Costs		Total
DynaEnergetics	$	20	$	143	$	295	$	458

Total	$	20	$	143	$	295	$	458



	Three months ended September 30, 2016
	Severance			Contract Termination Costs		Equipment Moving Costs		Other Exit Costs		Total
DynaEnergetics	$	(41	)	$	370	$	1	$	43	$	373

Total	$	(41	)	$	370	$	1	$	43	$	373



	Nine months ended September 30, 2016
	Severance		Contract Termination Costs		Equipment Moving Costs		Other Exit Costs		Total
DynaEnergetics	$	684	$	386	$	15	$	43	$	1,128
Corporate	74		—		—		—		74

Total	$	758	$	386	$	15	$	43	$	1,202



	December 31, 2016		Expense		Payments and Other Adjustments			September 30, 2017
Severance	$	62	$	20	$	(62	)	$	20
Contract termination costs	112		—		(102		)	10

Total	$	174	$	20	$	(164	)	$	30


	Three months ended September 30, 2023
	Amount		Per Share (1)
Net income attributable to DMC Global Inc. (2)	$	8,883	$	0.45
CEO transition expenses, net of tax	620		0.03
Restructuring expenses and asset impairments, net of tax	358		0.02






As adjusted	$	9,861	$	0.50


	Three months ended September 30, 2022
	Amount		Per Share (1)
Net income attributable to DMC Global Inc. (2)	$	6,717	$	0.35


NobelClad restructuring expenses, net of tax	5		—




As adjusted	$	6,722	$	0.35


	Nine months ended September 30, 2023
	Amount		Per Share (1)
Net income attributable to DMC Global Inc. (2)	$	23,495	$	1.20

CEO transition expenses and accelerated stock-based compensation, net of tax (3)	6,284		0.32



Restructuring expenses and asset impairments, net of tax	358		0.02


As adjusted	$	30,137	$	1.54


	Nine months ended September 30, 2022
	Amount		Per Share (1)
Net income attributable to DMC Global Inc. (2)	$	8,981	0.47
Amortization of acquisition-related inventory valuation step-up, net of tax	199		0.01

NobelClad restructuring expenses, net of tax	36		—




As adjusted	$	9,216	$	0.48


	Total number of shares purchased (1) (2)	Average price paid per share
July 1 to July 31, 2023	—	$	—
August 1 to August 31, 2023	8,064	$	18.47
September 1 to September 31, 2023	196	$	24.27
Total	8,260	$	18.61



	Total number of shares purchased (1) (2)	Average price paid per share
July 1 to July 31, 2017	—	$	—
August 1 to August 31, 2017	1,877	$	13.10
September 1 to September 30, 2017	—	$	—
Total	1,877	$	13.10



		DMC Global Inc.
		(Registrant)


Date:	~~October 26, 2017~~November 2, 2023	/s/ ~~Michael Kuta~~Eric V. Walter
		~~Michael Kuta,~~Eric V. Walter, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

Date:	November 2, 2023	/s/ Brett Seger
		Brett Seger, Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer)