DMC Global (BOOM) 10-Q 27 Apr 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 27, 2017
Document and Entity Information
Entity Registrant Name	DMC GLOBAL INC.
Entity Central Index Key	34,067
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		14,724,190

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 5,056	$ 6,419
Accounts receivable, net of allowance for doubtful accounts of $1,166 and $1,146, respectively	33,637	32,959
Inventory, net	31,037	28,833
Prepaid expenses and other	6,280	5,148
Total current assets	76,010	73,359
PROPERTY, PLANT AND EQUIPMENT	112,294	109,427
Less - accumulated depreciation	(54,606)	(52,294)
Property, plant and equipment, net	57,688	57,133
GOODWILL, net	16,218	16,097
PURCHASED INTANGIBLE ASSETS, net	15,018	15,827
OTHER ASSETS, net	130	139
TOTAL ASSETS	165,064	162,555
CURRENT LIABILITIES:
Accounts payable	13,484	13,260
Accrued expenses	4,132	4,173
Accrued anti-dumping duties	3,547	6,550
Dividend payable	295	290
Accrued income taxes	784	548
Accrued employee compensation and benefits	3,377	3,307
Customer advances	2,170	2,619
Total current liabilities	27,789	30,747
LINES OF CREDIT	21,925	15,732
DEFERRED TAX LIABILITIES	1,794	1,448
OTHER LONG-TERM LIABILITIES	2,309	2,219
Total liabilities	53,817	50,146
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.05 par value; 4,000,000 shares authorized; no issued and outstanding shares	0	0
Common stock, $0.05 par value; 25,000,000 shares authorized; 14,724,555 and 14,496,359 shares outstanding, respectively	738	725
Additional paid-in capital	73,674	73,116
Retained earnings	76,792	80,107
Other cumulative comprehensive loss	(39,696)	(41,514)
Treasury stock, at cost; 32,464 and 2,378 shares, respectively	(261)	(25)
Total stockholders’ equity	111,247	112,409
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 165,064	$ 162,555

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,166	$ 1,146
Preferred stock, par value (in dollars per share)	$ 0.05	$ 0.05
Preferred stock, shares authorized	4,000,000	4,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.05	$ 0.05
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares outstanding	14,724,555	14,496,359
Treasury stock, shares	32,464	2,378

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
NET SALES	$ 38,962	$ 40,532
COST OF PRODUCTS SOLD	28,596	30,147
Gross profit	10,366	10,385
COSTS AND EXPENSES:
General and administrative expenses	7,206	5,448
Selling and distribution expenses	4,482	4,023
Amortization of purchased intangible assets	984	999
Total costs and expenses	12,672	10,470
OPERATING LOSS	(2,306)	(85)
OTHER INCOME (EXPENSE):
Other income, net	421	32
Interest expense	(506)	(164)
Interest income	1	1
LOSS BEFORE INCOME TAXES	(2,390)	(216)
INCOME TAX PROVISION	630	197
NET LOSS	$ (3,020)	$ (413)
LOSS PER SHARE
Basic (in dollars per share)	$ (0.21)	$ (0.03)
Diluted (in dollars per share)	$ (0.21)	$ (0.03)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
Basic (in shares)	14,270,365	14,129,831
Diluted (in shares)	14,270,365	14,129,831
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share)	$ 0.02	$ 0.02

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (3,020)	$ (413)
Change in cumulative foreign currency translation adjustment	1,818	4,006
Total comprehensive income (loss)	$ (1,202)	$ 3,593

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Other Cumulative Comprehensive Loss	Treasury Stock
Balances (in shares) at Dec. 31, 2016		14,498,737				2,378
Balances at Dec. 31, 2016	$ 112,409	$ 725	$ 73,116	$ 80,107	$ (41,514)	$ (25)
Increase (Decrease) in Stockholders' Equity
Net loss	(3,020)			(3,020)
Change in cumulative foreign currency translation adjustment	1,818				1,818
Shares issued in connection with stock compensation plans (in shares)		258,282
Shares issued in connection with stock compensation plans	0	$ 13	(13)
Stock-based compensation	571		571
Dividends declared	(295)			(295)
Treasury stock purchases (in shares)						(30,086)
Treasury stock purchases	(236)					$ (236)
Balances (in shares) at Mar. 31, 2017		14,757,019				32,464
Balances at Mar. 31, 2017	$ 111,247	$ 738	$ 73,674	$ 76,792	$ (39,696)	$ (261)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (3,020)	$ (413)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation (including capital lease amortization)	1,681	1,514
Amortization of purchased intangible assets	984	999
Amortization of deferred debt issuance costs	299	41
Stock-based compensation	571	586
Deferred income tax provision (benefit)	346	(290)
Gain (loss) on disposal of property, plant and equipment	3	(11)
Change in:
Accounts receivable, net	(312)	3,612
Inventory, net	(1,792)	(325)
Prepaid expenses and other	(1,041)	(3,047)
Accounts payable	626	(927)
Customer advances	(453)	4,878
Accrued anti-dumping duties	(3,003)	35
Accrued expenses and other liabilities	(75)	(2,847)
Net cash provided by (used in) operating activities	(5,186)	3,805
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment	(1,649)	(435)
Proceeds on sale of property, plant and equipment	2	0
Change in other non-current assets	0	20
Net cash used in investing activities	(1,647)	(415)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayments) on bank lines of credit, net	6,000	(3,998)
Payment on capital lease obligations	0	(2)
Payment of dividends	(290)	(284)
Payment of deferred debt issuance costs	(106)	0
Treasury stock purchases	(222)	0
Net cash provided by (used in) financing activities	5,382	(4,284)
EFFECTS OF EXCHANGE RATES ON CASH	88	198
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,363)	(696)
CASH AND CASH EQUIVALENTS, beginning of the period	6,419	6,291
CASH AND CASH EQUIVALENTS, end of the period	$ 5,056	$ 5,595

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATION The information included in the condensed consolidated financial statements is unaudited but includes all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the interim periods presented. 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 .

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of DMC Global Inc. ("DMC") 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. Income Taxes The effective tax rate for each of the periods reported differs from the U.S. statutory rate due primarily to favorable foreign permanent differences, variation in contribution to consolidated pre-tax income from each jurisdiction for the respective periods and differences between the U.S. and foreign tax rates (which range from 20% to 35% ) on earnings that have been permanently reinvested. 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; 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 from such a position are measured as the largest benefit that is more likely than not of being 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 are in the process of being closed, and no adjustments to the Company's tax provisions have been 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. Earnings Per Share Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards (“RSAs”), are considered participating securities for purposes of calculating earnings per share (“EPS”) during periods in which we have net income and require the use of the two class method for calculating EPS. Under this method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock, as shown in the table below. Computation and reconciliation of earnings per share of common stock are as follows: Three months ended March 31, 2017 2016 Numerator: Net loss $ (3,020 ) $ (413 ) Less income allocated to RSAs — — Net loss allocated to common stock for EPS calculation $ (3,020 ) $ (413 ) Denominator: Weighted average common shares outstanding - basic 14,270,365 14,129,831 Dilutive stock-based compensation plans — — Weighted average common shares outstanding - diluted 14,270,365 14,129,831 Net income (loss) allocated to common stock for EPS calculation: Basic $ (0.21 ) $ (0.03 ) Diluted $ (0.21 ) $ (0.03 ) Fair Value of Financial Instruments The carrying value of cash and cash equivalents, trade accounts receivable and payable, accrued expenses and lines of credit approximate their fair value. 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. Recent Accounting Pronouncements In October 2016, the FASB issued an ASU which removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. This ASU is effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period for which neither interim nor annual financial statements have been made available. The Company has not adopted this ASU and is in the process of evaluating the impact of this update on its consolidated financial statements. 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 as of its issuance 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 the new leases 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. Earlier application is permitted only for annual reporting periods beginning after December 15, 2016, 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 preliminarily 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. In our NobelClad business, contracts are often for unique projects, but the vast majority of contracts contain standard terms. We have reviewed contracts representing a majority of NobelClad's revenue for the year ended December 31, 2016 and have preliminarily concluded that applying the new standard to those contracts would not have any impact on our financial statements. We have not analyzed atypical contracts, as due to the nature of NobelClad's projects and the unique terms in the contract, we would not likely enter into the same contract in the future. In our DynaEnergetics business, we sell different products to a wide variety of customers, but the contracts also often contain similar terms and conditions. To date, we have not evaluated contracts from the DynaEnergetics segment but expect to do so during the second quarter of 2017. The Company is continuing to evaluate the impacts of our pending adoption, and our preliminary assessments are subject to change.

INVENTORIES

INVENTORIES	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
INVENTORIES	INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market value. Cost elements included in inventory are material, labor, subcontract costs, and manufacturing overhead. As necessary, we record provisions and maintain reserves for excess, slow moving and obsolete inventory. To determine reserve amounts, we regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments. Inventories consist of the following at March 31, 2017 and December 31, 2016 and include reserves of $3,208 and $4,226 , respectively: March 31, December 31, Raw materials $ 12,666 $ 10,926 Work-in-process 6,082 5,417 Finished goods 11,978 12,146 Supplies 311 344 $ 31,037 $ 28,833

GOODWILL

GOODWILL	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL	GOODWILL All of the goodwill is recorded within our NobelClad segment. The changes to the carrying amount of goodwill during the period are summarized below: Goodwill balance at December 31, 2016 $ 16,097 Adjustment due to recognition of tax benefit of tax amortization of certain goodwill (120 ) Adjustment due to exchange rate differences 241 Goodwill balance at March 31, 2017 $ 16,218

PURCHASED INTANGIBLE ASSETS

PURCHASED INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
PURCHASED INTANGIBLE ASSETS	PURCHASED INTANGIBLE ASSETS The following table presents details of our purchased intangible assets, other than goodwill, as of March 31, 2017 : Gross Accumulated Amortization Net Core technology $ 17,999 $ (8,521 ) $ 9,478 Customer relationships 36,582 (31,121 ) 5,461 Trademarks / Trade names 1,930 (1,851 ) 79 Total intangible assets $ 56,511 $ (41,493 ) $ 15,018 The following table presents details of our purchased intangible assets, other than goodwill, as of December 31, 2016 : 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 The change in the gross value of our purchased intangible assets from December 31, 2016 to March 31, 2017 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.

CUSTOMER ADVANCES

CUSTOMER ADVANCES	3 Months Ended
	Mar. 31, 2017
Customer Advances Disclosure [Abstract]
CUSTOMER ADVANCES	CUSTOMER ADVANCES On occasion, we require customers to make advance payments prior to the shipment of goods in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. As of March 31, 2017 and December 31, 2016 , customer advances totaled $2,170 and $2,619 , respectively, and originated from several customers.

DEBT

DEBT	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
DEBT	DEBT Lines of credit consisted of the following at March 31, 2017 and December 31, 2016 : March 31, December 31, Syndicated credit agreement: U.S. Dollar revolving loan $ 22,250 $ 16,250 Euro revolving loan — — Long-term lines of credit 22,250 16,250 Less: debt issuance costs 325 518 Lines of credit $ 21,925 $ 15,732 Syndicated Credit Agreement As of December 31, 2016 , we had a $75,000 syndicated credit agreement (“credit facility”) that allowed for revolving loans of $65,000 in U.S. dollars and $10,000 in alternative currencies as well as a $100,000 accordion feature to increase the commitments in any of the loan classes subject to approval by applicable lenders. On March 6, 2017, we entered into a third amendment of our credit facility which, among other changes, reduced the amount of borrowings available 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 a minimum EBITDA covenant for those same periods and is inapplicable thereafter. 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 $100,000 accordion feature to increase the commitments in any of the loan classes subject to approval by applicable lenders. We also maintain a line of credit with a German bank for certain European operations. This line of credit provides a borrowing capacity of €4,000 , of which €2,558 is available after considering outstanding letters of credit. U.S. borrowings under the amended credit facility can be in the form of Alternate Base Rate loans (“ABR” borrowings are based on the greater of adjusted Prime rates, adjusted CD rates, or adjusted Federal Funds rates) or one, two, three, or six month London Interbank Offered 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 Prime Rate plus an applicable margin, respectively. Alternative currency borrowings denominated in Euros shall be comprised of Euro Interbank Offered Rate (“EURIBOR”) loans and bear interest at the EURIBOR rate plus an applicable margin (varying from 1.75% to 3.25% ). 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. Loan Covenants and Restrictions Our existing loan agreements include various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurrence of additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified financial ratios. As of March 31, 2017 , we were in compliance with all financial covenants and other provisions of our debt agreements.

BUSINESS SEGMENTS

BUSINESS SEGMENTS	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
BUSINESS SEGMENTS	BUSINESS SEGMENTS Our business is organized into two segments: NobelClad and DynaEnergetics. 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. DynaEnergetics designs, manufactures and distributes products utilized by the global oil and gas industry principally for the perforation of oil and gas wells. 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. Each segment’s products are marketed to different customer types and require different manufacturing processes and technologies. Segment information is presented for the three months ended March 31, 2017 and 2016 as follows: Three months ended March 31, 2017 2016 Net sales: NobelClad $ 16,934 $ 25,052 DynaEnergetics 22,028 15,480 Consolidated net sales $ 38,962 $ 40,532 Three months ended March 31, 2017 2016 Operating income (loss) NobelClad $ 395 $ 1,508 DynaEnergetics 40 920 Segment operating income 435 2,428 Unallocated corporate expenses (2,170 ) (1,927 ) Stock-based compensation (571 ) (586 ) Other income (expense), net 421 32 Interest expense (506 ) (164 ) Interest income 1 1 Loss before income taxes $ (2,390 ) $ (216 ) Three months ended March 31, 2017 2016 Depreciation and amortization: NobelClad $ 989 $ 932 DynaEnergetics 1,676 1,581 Segment depreciation and amortization $ 2,665 $ 2,513 During the three months ended March 31, 2017 and 2016 , no one customer accounted for more than 10% of total net sales.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	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 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, which determined certain imports, primarily used for gun carrier tubing, are included in the scope of the AD/CVD orders on OCTG from China and thus is 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, CIT ruled on the appeal, remanding the scope ruling and ordering the Commerce Department to reconsider its position (the “Remand Order”). Under the Remand Order, the Commerce Department must issue its final remand determination on or before June 7, 2017, and such remand determination would be subject to the ongoing appeal with CIT. On December 27, 2016, we received notice from U.S. Customs 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 are covered by our reserve. We filed a response to the notice on February 6, 2017 asserting our position 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 assessing formal 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 believe that this penalty assessment is premature and patently unreasonable in the face of the pending Remand Order and ongoing CIT appeal and that penalties are not appropriate under applicable legal standards. Further, even if penalties are found to be justified, we believe the amount of penalties asserted by U.S. Customs is unreasonable and subject to challenge on various grounds. We will vigorously defend against any imposition of penalties and seek a stay of penalty proceedings pending resolution of the remand determination and the ultimate resolution of the CIT appeal and any further appeals. We expect to submit a petition for relief and mitigation of penalties on or before May 17, 2017. 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. For the three months ended March 31, 2017 , the Company recorded $46 of interest on its reserve for AD/CVD duties, bringing the total reserved amount related to AD/CVD duties as of March 31, 2017 to $3,547 . The Tendered Amounts were applied to reduce the reserve. The Company 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 March 31, 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® shaped charges infringe the ‘431 patent and the trademark. DynaEnergetics, denying the validity and infringement of the ‘431 patent and trademark, has vigorously defended against this lawsuit. 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 decision has been issued to invalidate 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 instituted an Inter Parties Review (IPR) against the ‘563 patent at the U.S. Patent and Trademark Office (“USPTO”), requesting that the ’563 patent be declared invalid by the USPTO. On March 17, 2017, DynaEnergetics' IPR request was granted by the USPTO. Trial on the '563 patent has been stayed pending the resolution of the IPR. We do not believe that the ‘563 patent or infringement claims based on the patent are valid, and we do not believe it is probable that we will incur a material loss on the '563 matter or in any appeals of the '431 decision. However, if the District Court or a jury determines that the patents are valid and that DynaEnergetics 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, and we have not accrued for any such losses. Such an evaluation includes, among other things, a determination of the total number of infringing sales in the United States of the implicated systems; 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.

SIGNIFICANT ACCOUNTING POLICI17

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The condensed consolidated financial statements include the accounts of DMC Global Inc. ("DMC") 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.
Income Taxes	Income Taxes The effective tax rate for each of the periods reported differs from the U.S. statutory rate due primarily to favorable foreign permanent differences, variation in contribution to consolidated pre-tax income from each jurisdiction for the respective periods and differences between the U.S. and foreign tax rates (which range from 20% to 35% ) on earnings that have been permanently reinvested. 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; 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 from such a position are measured as the largest benefit that is more likely than not of being 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 are in the process of being closed, and no adjustments to the Company's tax provisions have been 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.
Earnings Per Share	Earnings Per Share Unvested awards of share-based payments with rights to receive dividends or dividend equivalents, such as our restricted stock awards (“RSAs”), are considered participating securities for purposes of calculating earnings per share (“EPS”) during periods in which we have net income and require the use of the two class method for calculating EPS. Under this method, a portion of net income is allocated to these participating securities and therefore is excluded from the calculation of EPS allocated to common stock, as shown in the table below.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying value of cash and cash equivalents, trade accounts receivable and payable, accrued expenses and lines of credit approximate their fair value.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In October 2016, the FASB issued an ASU which removes the prohibition against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. This ASU is effective for public business entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual reporting period for which neither interim nor annual financial statements have been made available. The Company has not adopted this ASU and is in the process of evaluating the impact of this update on its consolidated financial statements. 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 as of its issuance 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 the new leases 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. Earlier application is permitted only for annual reporting periods beginning after December 15, 2016, 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 preliminarily 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. In our NobelClad business, contracts are often for unique projects, but the vast majority of contracts contain standard terms. We have reviewed contracts representing a majority of NobelClad's revenue for the year ended December 31, 2016 and have preliminarily concluded that applying the new standard to those contracts would not have any impact on our financial statements. We have not analyzed atypical contracts, as due to the nature of NobelClad's projects and the unique terms in the contract, we would not likely enter into the same contract in the future. In our DynaEnergetics business, we sell different products to a wide variety of customers, but the contracts also often contain similar terms and conditions. To date, we have not evaluated contracts from the DynaEnergetics segment but expect to do so during the second quarter of 2017. The Company is continuing to evaluate the impacts of our pending adoption, and our preliminary assessments are subject to change.
Inventories	Inventories are stated at the lower of cost (first-in, first-out) or market value. Cost elements included in inventory are material, labor, subcontract costs, and manufacturing overhead. As necessary, we record provisions and maintain reserves for excess, slow moving and obsolete inventory. To determine reserve amounts, we regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments.
Customer Advances	On occasion, we require customers to make advance payments prior to the shipment of goods in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels.

SIGNIFICANT ACCOUNTING POLICI18

SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Schedule of computation and reconciliation of earnings per common share	Computation and reconciliation of earnings per share of common stock are as follows: Three months ended March 31, 2017 2016 Numerator: Net loss $ (3,020 ) $ (413 ) Less income allocated to RSAs — — Net loss allocated to common stock for EPS calculation $ (3,020 ) $ (413 ) Denominator: Weighted average common shares outstanding - basic 14,270,365 14,129,831 Dilutive stock-based compensation plans — — Weighted average common shares outstanding - diluted 14,270,365 14,129,831 Net income (loss) allocated to common stock for EPS calculation: Basic $ (0.21 ) $ (0.03 ) Diluted $ (0.21 ) $ (0.03 )

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Mar. 31, 2017
Inventory Disclosure [Abstract]
Schedule of components of inventory	Inventories consist of the following at March 31, 2017 and December 31, 2016 and include reserves of $3,208 and $4,226 , respectively: March 31, December 31, Raw materials $ 12,666 $ 10,926 Work-in-process 6,082 5,417 Finished goods 11,978 12,146 Supplies 311 344 $ 31,037 $ 28,833

GOODWILL (Tables)

GOODWILL (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of changes to the carrying amount of goodwill	The changes to the carrying amount of goodwill during the period are summarized below: Goodwill balance at December 31, 2016 $ 16,097 Adjustment due to recognition of tax benefit of tax amortization of certain goodwill (120 ) Adjustment due to exchange rate differences 241 Goodwill balance at March 31, 2017 $ 16,218

PURCHASED INTANGIBLE ASSETS (Ta

PURCHASED INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of details of purchased intangible assets, other than goodwill	The following table presents details of our purchased intangible assets, other than goodwill, as of March 31, 2017 : Gross Accumulated Amortization Net Core technology $ 17,999 $ (8,521 ) $ 9,478 Customer relationships 36,582 (31,121 ) 5,461 Trademarks / Trade names 1,930 (1,851 ) 79 Total intangible assets $ 56,511 $ (41,493 ) $ 15,018 The following table presents details of our purchased intangible assets, other than goodwill, as of December 31, 2016 : 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

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of lines of credit	Lines of credit consisted of the following at March 31, 2017 and December 31, 2016 : March 31, December 31, Syndicated credit agreement: U.S. Dollar revolving loan $ 22,250 $ 16,250 Euro revolving loan — — Long-term lines of credit 22,250 16,250 Less: debt issuance costs 325 518 Lines of credit $ 21,925 $ 15,732

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Reporting [Abstract]
Schedule of segment information	Segment information is presented for the three months ended March 31, 2017 and 2016 as follows: Three months ended March 31, 2017 2016 Net sales: NobelClad $ 16,934 $ 25,052 DynaEnergetics 22,028 15,480 Consolidated net sales $ 38,962 $ 40,532 Three months ended March 31, 2017 2016 Operating income (loss) NobelClad $ 395 $ 1,508 DynaEnergetics 40 920 Segment operating income 435 2,428 Unallocated corporate expenses (2,170 ) (1,927 ) Stock-based compensation (571 ) (586 ) Other income (expense), net 421 32 Interest expense (506 ) (164 ) Interest income 1 1 Loss before income taxes $ (2,390 ) $ (216 ) Three months ended March 31, 2017 2016 Depreciation and amortization: NobelClad $ 989 $ 932 DynaEnergetics 1,676 1,581 Segment depreciation and amortization $ 2,665 $ 2,513

SIGNIFICANT ACCOUNTING POLICI24

SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Taxes
Income tax rate, low end	20.00%
Income tax rate, high end	35.00%
Numerator:
Net loss	$ (3,020)	$ (413)
Less income allocated to RSAs	0	0
Net loss allocated to common stock for EPS calculation	$ (3,020)	$ (413)
Denominator:
Weighted average common shares outstanding - basic (In shares)	14,270,365	14,129,831
Dilutive stock-based compensation plans (In shares)	0	0
Weighted average common shares outstanding - diluted (In shares)	14,270,365	14,129,831
Net income (loss) allocated to common stock for EPS calculation:
Basic (in dollars per share)	$ (0.21)	$ (0.03)
Diluted (in dollars per share)	$ (0.21)	$ (0.03)

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Inventory valuation reserves	$ 3,208	$ 4,226
Inventories
Raw materials	12,666	10,926
Work-in-process	6,082	5,417
Finished goods	11,978	12,146
Supplies	311	344
Total inventory	$ 31,037	$ 28,833

GOODWILL (Details)

GOODWILL (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)
Changes to the carrying amount of goodwill
Goodwill balance at the beginning of the period	$ 16,097
Goodwill balance at the end of the period	16,218
Operating Segments | NobelClad
Changes to the carrying amount of goodwill
Goodwill balance at the beginning of the period	16,097
Adjustment due to recognition of tax benefit of tax amortization of certain goodwill	(120)
Adjustment due to exchange rate differences	241
Goodwill balance at the end of the period	$ 16,218

PURCHASED INTANGIBLE ASSETS (De

PURCHASED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Purchased intangible assets
Gross	$ 56,511	$ 55,742
Accumulated Amortization	(41,493)	(39,915)
Net	15,018	15,827
Core technology
Purchased intangible assets
Gross	17,999	17,751
Accumulated Amortization	(8,521)	(8,165)
Net	9,478	9,586
Customer relationships
Purchased intangible assets
Gross	36,582	36,088
Accumulated Amortization	(31,121)	(29,965)
Net	5,461	6,123
Trademarks / Trade names
Purchased intangible assets
Gross	1,930	1,903
Accumulated Amortization	(1,851)	(1,785)
Net	$ 79	$ 118

CUSTOMER ADVANCES (Details)

CUSTOMER ADVANCES (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Customer Advances Disclosure [Abstract]
Customer advances	$ 2,170	$ 2,619

DEBT - Narrative (Details)

DEBT - Narrative (Details) - Credit Facility	3 Months Ended
	Mar. 31, 2017USD ($)	Mar. 31, 2017EUR (€)	Dec. 31, 2016USD ($)
Syndicated Credit Facility 2015 [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 35,000,000		$ 75,000,000
Accordion feature	100,000,000		100,000
Syndicated Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity			65,000,000
U.S. Dollar revolving loan
Debt Instrument [Line Items]
Maximum borrowing capacity	30,000,000
Alternate currencies revolving loan
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 5,000,000		$ 10,000,000
Alternate currencies revolving loan | Minimum | Euro Interbank Offered Rate (EURIBOR)
Debt Instrument [Line Items]
Basis spread on variable interest rate	1.75%
Alternate currencies revolving loan | Maximum | Euro Interbank Offered Rate (EURIBOR)
Debt Instrument [Line Items]
Basis spread on variable interest rate	3.25%
German line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity | €		€ 4,000,000
Available borrowing capacity | €		€ 2,558,000

DEBT - Schedule of Debt (Detail

DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Lines of credit
Long-term lines of credit	$ 22,250	$ 16,250
Less: debt issuance costs	325	518
Lines of credit	21,925	15,732
Euro revolving loan
Lines of credit
Long-term lines of credit	0	0
Credit Facility | U.S. Dollar revolving loan
Lines of credit
Long-term lines of credit	$ 22,250	$ 16,250

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017USD ($)Segment	Mar. 31, 2016USD ($)
Segment information
Number of segments | Segment	2
Consolidated net sales	$ 38,962	$ 40,532
Segment operating income	(2,306)	(85)
Other income (expense), net	421	32
Interest expense	(506)	(164)
Interest income	1	1
LOSS BEFORE INCOME TAXES	(2,390)	(216)
Operating Segments
Segment information
Consolidated net sales	38,962	40,532
Segment operating income	435	2,428
Segment depreciation and amortization	2,665	2,513
Segment Reconciling Items
Segment information
Unallocated corporate expenses	(2,170)	(1,927)
Stock-based compensation	(571)	(586)
NobelClad | Operating Segments
Segment information
Consolidated net sales	16,934	25,052
Segment operating income	395	1,508
Segment depreciation and amortization	989	932
DynaEnergetics | Operating Segments
Segment information
Consolidated net sales	22,028	15,480
Segment operating income	40	920
Segment depreciation and amortization	$ 1,676	$ 1,581

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - US Customs Notice of Action - Unfavorable Regulatory Action - USD ($) $ in Thousands	Mar. 06, 2017	Feb. 16, 2017	Aug. 31, 2015	Mar. 31, 2017	Dec. 27, 2016	Jul. 31, 2015
Loss Contingencies [Line Items]
Requested payment of AD/CVD cash deposits		$ 14,783			$ 3,049
AD/CVD cash deposits to be remitted or bond posted	$ 3,049	$ 3,049
Loss contingency reserve				$ 3,547
Threatened Litigation
Loss Contingencies [Line Items]
Requested payment of AD/CVD cash deposits						$ 1,100
AD/CVD cash deposits to be remitted or bond posted			$ 1,100
Interest expense
Loss Contingencies [Line Items]
Addition to reserve				$ 46