Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 05, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-14775 | |
Entity Registrant Name | DMC GLOBAL INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-0608431 | |
Entity Address, Address Line One | 11800 Ridge Parkway | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Broomfield | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80021 | |
City Area Code | 303 | |
Local Phone Number | 665-5700 | |
Title of 12(b) Security | Common Stock, $0.05 Par Value | |
Trading Symbol | BOOM | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 19,497,194 | |
Entity Central Index Key | 0000034067 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 15,376 | $ 30,810 |
Accounts receivable, net of allowance for doubtful accounts of $2,752 and $2,773, respectively | 79,782 | 71,932 |
Inventories | 143,304 | 124,214 |
Prepaid expenses and other | 17,354 | 12,240 |
Total current assets | 255,816 | 239,196 |
Property, plant and equipment | 192,161 | 191,022 |
Less - accumulated depreciation | (71,682) | (68,944) |
Property, plant and equipment, net | 120,479 | 122,078 |
Goodwill | 140,234 | 141,266 |
Purchased intangible assets, net | 242,568 | 255,576 |
Deferred tax assets | 8,379 | 6,930 |
Other assets | 96,448 | 99,366 |
Total assets | 863,924 | 864,412 |
Current liabilities: | ||
Accounts payable | 48,114 | 40,276 |
Accrued expenses | 14,793 | 13,585 |
Accrued income taxes | 834 | 9 |
Accrued employee compensation and benefits | 9,208 | 9,766 |
Contract liabilities | 26,952 | 21,052 |
Current portion of long-term debt | 15,000 | 15,000 |
Other current liabilities | 6,287 | 6,126 |
Total current liabilities | 121,188 | 105,814 |
Long-term debt | 128,710 | 132,425 |
Deferred tax liabilities | 937 | 2,202 |
Other long-term liabilities | 64,398 | 66,250 |
Total liabilities | 315,233 | 306,691 |
Commitments and contingencies (Note 12) | ||
Redeemable noncontrolling interest | 197,196 | 197,196 |
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; 20,084,272 and 19,920,829 shares issued, respectively | 1,004 | 996 |
Additional paid-in capital | 296,774 | 294,515 |
Retained earnings | 102,026 | 111,031 |
Other cumulative comprehensive loss | (27,742) | (26,538) |
Treasury stock, at cost, and company stock held for deferred compensation, at par; 587,188 and 570,415 shares, respectively | (20,567) | (19,479) |
Total stockholders’ equity | 351,495 | 360,525 |
Total liabilities, redeemable noncontrolling interest, and stockholders’ equity | $ 863,924 | $ 864,412 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 2,752 | $ 2,773 |
Preferred stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Preferred stock, authorized (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, issued (in shares) | 20,084,272 | 19,920,829 |
Treasury stock (in shares) | 587,188 | 570,415 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 138,716 | $ 55,658 |
Cost of products sold | 101,810 | 42,745 |
Gross profit | 36,906 | 12,913 |
Costs and expenses: | ||
General and administrative expenses | 17,718 | 7,929 |
Selling and distribution expenses | 10,090 | 5,243 |
Amortization of purchased intangible assets | 12,976 | 324 |
Restructuring expenses and asset impairments | 32 | 127 |
Total costs and expenses | 40,816 | 13,623 |
Operating loss | (3,910) | (710) |
Other income (expense): | ||
Other (expense) income, net | (209) | 394 |
Interest expense, net | (1,024) | (135) |
Loss before income taxes | (5,143) | (451) |
Income tax benefit | (863) | (883) |
Net (loss) income | (4,280) | 432 |
Less: Net loss attributable to redeemable noncontrolling interest | (992) | 0 |
Net (loss) income attributable to DMC Global Inc. stockholders | $ (3,288) | $ 432 |
Net (loss) income per share attributable to DMC Global Inc. stockholders: | ||
Basic (in dollars per share) | $ (0.47) | $ 0.03 |
Diluted (in dollars per share) | $ (0.47) | $ 0.03 |
Weighted average shares outstanding: | ||
Basic (in shares) | 19,301,126 | 15,453,103 |
Diluted (in shares) | 19,301,126 | 15,463,923 |
Reconciliation to net (loss) income attributable to DMC Global Inc. stockholders | ||
Net income attributable to DMC Global Inc. stockholders | $ (3,288) | $ 432 |
Adjustment of redeemable noncontrolling interest | (5,717) | 0 |
Net (loss) income attributable to DMC Global Inc. common shareholders after adjustment of redeemable noncontrolling interest | $ (9,005) | $ 432 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (4,280) | $ 432 |
Change in cumulative foreign currency translation adjustment | (1,204) | (1,967) |
Other comprehensive loss | (5,484) | (1,535) |
Less: comprehensive loss attributable to redeemable noncontrolling interest | (992) | 0 |
Comprehensive loss attributable to DMC Global Inc. stockholders | $ (4,492) | $ (1,535) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTEREST - USD ($) $ in Thousands | Total | Parent | Common Stock | Additional Paid-In Capital | Retained Earnings | Other Cumulative Comprehensive Loss | Treasury Stock and Company Stock Held for Deferred Compensation |
Beginning balances (in shares) at Dec. 31, 2020 | 15,917,559 | 528,274 | |||||
Beginning balances at Dec. 31, 2020 | $ 196,914 | $ 796 | $ 117,387 | $ 115,657 | $ (22,962) | $ (13,964) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | $ 432 | 432 | 432 | ||||
Change in cumulative foreign currency translation adjustment | (1,967) | (1,967) | (1,967) | ||||
Shares issued in connection with public offering (in shares) | 397,820 | ||||||
Shares issued in connection with at-the-market offering program | 25,262 | $ 20 | 25,242 | ||||
Shares issued in connection with stock compensation plans (in shares) | 84,434 | ||||||
Shares issued in connection with stock compensation plans | 0 | $ 4 | (4) | ||||
Stock-based compensation | 1,469 | 1,469 | |||||
Treasury stock activity (in shares) | (38,069) | ||||||
Treasury stock activity | (3,680) | $ (3,680) | |||||
Ending balances (in shares) at Mar. 31, 2021 | 16,399,813 | 566,343 | |||||
Ending balances at Mar. 31, 2021 | 218,430 | $ 820 | 144,094 | 116,089 | (24,929) | $ (17,644) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Stock-based compensation | 1,469 | 1,469 | |||||
Beginning balances (in shares) at Dec. 31, 2021 | 19,920,829 | 570,415 | |||||
Beginning balances at Dec. 31, 2021 | 360,525 | 360,525 | $ 996 | 294,515 | 111,031 | (26,538) | $ (19,479) |
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (4,280) | (3,288) | (3,288) | ||||
Change in cumulative foreign currency translation adjustment | (1,204) | (1,204) | (1,204) | ||||
Shares issued in connection with stock compensation plans (in shares) | 163,443 | ||||||
Shares issued in connection with stock compensation plans | $ 8 | (8) | |||||
Adjustment of redeemable noncontrolling interest to redemption value | 5,717 | (5,717) | (5,717) | ||||
Stock-based compensation | 102 | 2,267 | 2,267 | ||||
Treasury stock activity (in shares) | (16,773) | ||||||
Treasury stock activity | (1,088) | $ (1,088) | |||||
Ending balances (in shares) at Mar. 31, 2022 | 20,084,272 | 587,188 | |||||
Ending balances at Mar. 31, 2022 | 351,495 | 351,495 | $ 1,004 | 296,774 | 102,026 | $ (27,742) | $ (20,567) |
Redeemable Non-Controlling interest, beginning balance at Dec. 31, 2021 | 197,196 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net loss | (992) | ||||||
Escrow adjustment related to redeemable noncontrolling interest | (427) | ||||||
Adjustment of redeemable noncontrolling interest to redemption value | 5,717 | (5,717) | $ (5,717) | ||||
Stock-based compensation | 102 | $ 2,267 | $ 2,267 | ||||
Distribution to redeemable noncontrolling interest holder | (4,400) | ||||||
Redeemable Non-Controlling interest, ending balance at Mar. 31, 2022 | $ 197,196 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows (used in) provided by operating activities: | ||
Net (loss) income | $ (4,280) | $ 432 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Depreciation | 3,359 | 2,698 |
Amortization of purchased intangible assets | 12,976 | 324 |
Amortization of deferred debt issuance costs | 132 | 56 |
Amortization of acquisition-related inventory valuation step-up | 258 | 0 |
Stock-based compensation | 2,358 | 1,608 |
Deferred income taxes | (2,714) | (2,334) |
Loss (gain) on disposal of property, plant and equipment | 9 | (288) |
Restructuring expenses and asset impairments | 32 | 127 |
Change in: | ||
Accounts receivable, net | (7,480) | (4,629) |
Inventories | (19,877) | (6,184) |
Prepaid expenses and other | (2,324) | (4,480) |
Accounts payable | 7,162 | 9,963 |
Contract liabilities | 5,968 | 2,432 |
Accrued expenses and other liabilities | (163) | 2,451 |
Net cash (used in) provided by operating activities | (4,584) | 2,176 |
Cash flows (used in) provided by investing activities: | ||
Proceeds from maturities of marketable securities | 0 | 4,799 |
Acquisition of property, plant and equipment | (1,536) | (1,365) |
Proceeds on sale of property, plant and equipment | 0 | 281 |
Net cash (used in) provided by investing activities | (1,536) | 3,715 |
Cash flows (used in) provided by financing activities: | ||
Payments on term loan | (3,750) | 0 |
Repayments on capital expenditure facility | 0 | (11,750) |
Payment of debt issuance costs | (97) | 0 |
Distributions to redeemable noncontrolling interest holder | (4,400) | 0 |
Net proceeds from issuance of common stock through at-the-market offering program | 0 | 25,262 |
Treasury stock purchases | (1,088) | (2,435) |
Net cash (used in) provided by financing activities | (9,335) | 11,077 |
Effects of exchange rates on cash | 21 | 682 |
Net (decrease) increase in cash and cash equivalents | (15,434) | 17,650 |
Cash and cash equivalents, beginning of the period | 30,810 | 28,187 |
Cash and cash equivalents, end of the period | $ 15,376 | $ 45,837 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
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. 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, 2021. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
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”, “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. Accounts and Notes Receivable The Company measures expected credit losses for its accounts receivable using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company has disaggregated pools of accounts receivable balances by business, geography and/or customer risk profile and has used history and other experience to establish an allowance for credit losses at the time the receivable is recognized. To measure expected credit losses, we have elected to pool trade receivables by segment and analyze each segment’s accounts receivable balances as separate populations. Within each segment, receivables exhibit similar risk characteristics. During the three months ended March 31, 2022, our expected loss rate reflects uncertainties in market conditions that could impact our businesses, including COVID-19 related considerations, supply chain disruptions, 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 for credit losses (with the offsetting expense charged to “Selling and distribution expenses” in our Condensed Consolidated Statements of Operations) against the amounts due, reducing the net recognized receivable to the amount we estimate will be collected. In total, net recoveries of $20 were recorded during the three months ended March 31, 2022. Net recoveries recorded do not reflect $1,237 of receivable balances outstanding that we are currently monitoring related to a DynaEnergetics customer that operates in Western Ukraine. 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, 2021 $ — $ 2,758 $ 15 $ 2,773 Current period provision for expected credit losses $ 11 16 — 27 Recoveries of amounts previously reserved $ — (47) — (47) Impacts of foreign currency exchange rates and other $ — (1) — (1) Allowance for doubtful accounts, March 31, 2022 $ 11 $ 2,726 $ 15 $ 2,752 During 2021, the Company entered into a note receivable with terms of repayment over five years, collateralized by certain fixed assets. The note, with an outstanding current balance of $974 as of March 31, 2022 recorded within “Prepaid expenses and other” and an outstanding long-term balance of $8,768 as of March 31, 2022 recorded within “Other Assets”, is considered an arrangement with a variable interest entity for which the Company is not the primary beneficiary and has concluded does not require consolidation. Revenue Recognition The Company’s revenues are primarily derived from consideration paid by customers for tangible goods. The Company analyzes its different goods by segment to determine the appropriate basis for revenue recognition. Revenue is not generated from sources other than contracts with customers and revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. There are no material upfront costs for operations that are incurred from contracts with customers. 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 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. Please refer to Note 6 "Contract Liabilities" for further information on contract liabilities and Note 10 "Business Segments" for disaggregated revenue disclosures. See additional revenue recognition policy disclosures specific to the DynaEnergetics and NobelClad business segments within our Annual Report filed on Form 10-K for the year ended December 31, 2021. Arcadia Customers agree to terms and conditions at the time of initiating an order. The significant majority of transactions contain standard architectural building materials that are not made-to-order, which include storefronts and entrances, windows, curtain walls, doors and interior partitions. In instances where multiple products are included within an order, each product represents a separate performance obligation given that: (1) the customer can benefit from each product on a standalone basis and (2) each product is distinct within the context of the contract. The transaction price is readily determinable and fixed at the time the transaction is entered into with the customer. Arcadia is entitled to each product’s transaction price upon the customer obtaining control of the item. For standard architectural building materials that are not made-to-order, such control transfers at a point in time, which is generally when the product has been delivered to the customer and the legal title has been transferred. Upon delivery and title transfer, Arcadia has performed its contractual requirements such that it has a present right to payment, and the customer from that point forward bears all risks and rewards of ownership. In addition, at this date, the customer has the ability to direct the use of, or restrict access to, the asset. Payment discounts, rebates, refunds, or any other forms of variable consideration are typically not included within Arcadia contracts. For contracts that contain only one performance obligation, the total transaction price is allocated to the sole performance obligation. For contracts which contain multiple distinct performance obligations, judgment is required to determine the standalone selling price (“SSP”) for each performance obligation. However, such judgment is largely mitigated given that standard architectural building materials purchased are generally shipped at the same time. In instances where products purchased are not shipped at the same time, Arcadia uses the contractually stated price to determine SSP as this price approximates the price of each good as sold separately. At times, Arcadia will also contract with customers to supply customized architectural building materials based on design specifications, measurements, finishes, framing materials, and other options selected by the customer at the time an order is initiated. For these contracts, Arcadia has an enforceable right to payment from its customers at the time an order is received and accepted for all manufacturing efforts expended on behalf of its customers. Due to the customized nature of these products, the Company has concluded that the substantial portion of the related goods produced have no alternative use, and therefore control of these products passes to the customer over time. We have concluded that recognizing revenue utilizing an over-time output method based upon units delivered reasonably depicts the fulfillment of our performance obligations under our contracts and the value received by the customer based upon our performance to date. This conclusion is further supported by the frequency of shipments in fulfilling these contracts. We have elected not to disclose our unsatisfied performance obligations as of March 31, 2022 under the short-term contract exemption as we expect such performance obligations will be satisfied within the next 12 months following the end of the reporting period. Billings for customized architectural building materials occur at times upon delivery, but also can occur via pre-established billing schedules agreed-upon at the commencement of the contract. Therefore, we frequently generate contract liabilities in instances when we have billed the customer in excess of revenue recognized for units delivered. Income Taxes We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax basis 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 is 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 that it 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 to be realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense. Earnings Per Share In periods with net income, the Company computes earnings per share (“EPS”) using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared and participation rights in undistributed earnings. Restricted stock awards 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. Please refer to Note 3 "Business Combination" for further discussion of the calculation of the adjustment of the redeemable noncontrolling interest to redemption value as of the end of the period presented. 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 such effect is dilutive. The effect of the 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 treasury stock method was less dilutive than the two-class method; as such, only the two-class method has been included below. Three months ended March 31, 2022 2021 Net (loss) income attributable to DMC Global Inc. stockholders, as reported $ (3,288) $ 432 Less: Adjustment of redeemable noncontrolling interest (5,717) — Less: Undistributed net income available to participating securities — (5) Numerator for basic net (loss) income per share: (9,005) 427 Add: Undistributed net income allocated to participating securities — 5 Less: Undistributed net income reallocated to participating securities — (5) Numerator for diluted net (loss) income per share: (9,005) 427 Denominator: Weighted average shares outstanding for basic net (loss) income per share 19,301,126 15,453,103 Effect of dilutive securities (1) — 10,820 Weighted average shares outstanding for diluted net (loss) income per share 19,301,126 15,463,923 Net (loss) income per share Basic $ (0.47) $ 0.03 Diluted $ (0.47) $ 0.03 (1) For the three months ended March 31, 2022, 14,069 shares have been excluded as their effect would have been anti-dilutive. Deferred compensation The Company maintains a Non-Qualified Deferred Compensation Plan (the “Plan”) as part of its overall compensation package for certain employees. Participants are eligible to defer a portion of their annual salary, their annual incentive bonus, and their equity awards through the Plan on a tax-deferred basis. Deferrals into the Plan 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 be settled either by delivery of a fixed number of shares of DMC’s common stock or in cash, in accordance with participant contributions and elections. For deferred equity awards, subsequent to equity award vesting and after a period prescribed by the Plan, participants can elect to diversify contributions of equity awards into other investment options available to Plan participants. If diversified, these contributions will be subsequently settled by delivery of cash. The Company has established a grantor trust commonly known as a “rabbi trust” and contributed certain assets to satisfy the future obligations to participants in the Plan. These assets are subject to potential claims of the Company’s general creditors. The assets held in the trust include unvested restricted stock awards (“RSAs”), vested company stock awards, company-owned life insurance (“COLI”) on certain 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: Balance Sheet location March 31, 2022 December 31, 2021 Deferred compensation assets Other assets $ 13,973 $ 13,812 Deferred compensation obligations Other long-term liabilities $ 15,516 $ 15,944 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 accounts receivable and payable, accrued expenses, and the revolving loans and term loan under our credit facility, when outstanding, approximate their fair value. Our revolving loans and term loan under our credit facility, when outstanding, reset each month at market interest rates. As a result, we classify these liabilities as Level 1 in the fair value hierarchy. 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 classify these instruments as Level 2 in the fair value hierarchy. Money market funds and mutual funds of $9,430 as of March 31, 2022 and $9,083 as of December 31, 2021 held to satisfy future deferred compensation obligations are valued based upon the market values of underlying securities, and therefore we classify these assets as Level 2 in the fair value hierarchy. We did not hold any Level 3 assets or liabilities as of March 31, 2022 or December 31, 2021. However, the fair value measurements of certain assets and liabilities acquired as part of the Arcadia acquisition were based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board issued a new accounting standard which provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions apply only to contracts and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The Company will adopt this standard when LIBOR is discontinued; however, given that we do not have significant exposure to LIBOR or other referenced rates expected to be discontinued, we do not believe that adoption of this standard will have a material impact on our Consolidated Financial Statements. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION On December 16, 2021, the Company entered into an equity purchase agreement with Arcadia, Inc., a California corporation, the shareholders of Arcadia, Inc. and certain other parties (the “Equity Purchase Agreement”). On December 23, 2021, pursuant to the Equity Purchase Agreement, the Company completed the acquisition of a 60% controlling interest in Arcadia Products, LLC, a Colorado limited liability company resulting from the conversion of Arcadia, Inc. (collectively, “Arcadia”) for closing consideration of $261,000 in cash (excluding $7,654 in acquired cash) and 551,458 shares of its common stock, par value $0.05 per share. A portion of the cash consideration was placed into escrow and is subject to certain post-closing adjustments. DMC acquired Arcadia as part of its strategy of building a diversified portfolio of industry-leading businesses with differentiated products and services. Arcadia is a leading U.S. supplier of architectural building products, which include exterior and interior framing systems, windows, curtain walls, doors, and interior partitions for the commercial buildings market, and highly engineered windows and doors for the high-end residential real estate market. The acquisition was funded by the Company through cash and marketable securities, equity, and debt financing. Assets acquired and liabilities assumed have been recorded at their fair values. Certain fair values were determined by management using the assistance of third-party valuation specialists. The valuation methods used to determine the fair value of intangible assets included the income approach—excess earnings method for customer relationships and the income approach—relief from royalty method for the trade name acquired. A number of assumptions and estimates were involved in the application of these valuation methods, including forecasts of revenues, costs of revenues, operating expenses, tax rates, forecasted capital expenditures, customer attrition rate, discount rates and working capital changes. The following table sets forth the preliminary components of the fair value of the total consideration transferred and preliminary purchase price allocation of the net assets acquired at the date of acquisition, along with the measurement period adjustments that occurred during the quarter. The assets acquired and liabilities assumed exclude Arcadia's right-of-use asset and lease liabilities, respectively, as they have an immaterial impact on the total net assets acquired. Please see Note 7 “Leases” for additional discussion of lease accounting. The total consideration transferred is still subject to potential adjustment and the preliminary purchase price allocation related to the assets acquired and liabilities assumed may be adjusted as a result of the finalization of our procedures, primarily as it pertains to the valuation of certain long-lived assets. Preliminary Measurement Period Adjustments Preliminary December 23, 2021 March 31, 2022 Cash, including cash acquired (1) $ 268,654 $ (640) $ 268,014 Equity (2) 21,716 — 21,716 Total fair value of consideration transferred 290,370 (640) 289,730 Assets acquired: Cash and cash equivalents $ 7,654 $ — $ 7,654 Accounts receivable 31,456 — 31,456 Inventories 60,503 — 60,503 Prepaid expenses and other 2,438 — 2,438 Property, plant and equipment (3) 17,323 — 17,323 Goodwill (4) 141,266 (1,032) 140,234 Intangible assets (5) 254,500 — 254,500 Other long-term assets 122 (35) 87 Total assets acquired 515,262 (1,067) 514,195 Liabilities assumed: Accounts payable 8,792 — 8,792 Other current liabilities 22,520 — 22,520 Total liabilities assumed 31,312 — 31,312 Redeemable noncontrolling interest (6) 193,580 (427) 193,153 Total assets acquired and liabilities assumed $ 290,370 $ (640) $ 289,730 (1) Cash sources of funding included $150,000 in new term loan debt and $118,654 of cash and marketable securities on hand. During the quarter ended March 31, 2022, working capital estimates at the time of acquisition were finalized. In April 2022, $640 was returned to the Company from the funds previously placed into escrow. (2) Equity consideration included 551,458 shares of DMC common stock. (3) Property, plant and equipment primarily consists of the following: Land $ 2,922 Buildings and improvements 4,015 Manufacturing equipment and tooling 9,877 Furniture, fixtures, and computer equipment 95 Other 414 Total property, plant and equipment 17,323 The useful lives of the property, plant and equipment is consistent with the Company's accounting policies. (4) Amounts recorded for goodwill resulting in a tax basis step-up are generally expected to be deductible for tax purposes. Tax deductible goodwill is estimated to be $85,815. (5) Intangible assets consist of $211,000 of customer relationships, $22,000 of trade name, and $21,500 of customer backlog. (6) Redeemable noncontrolling interest represents 40% of the total fair value of Arcadia upon acquisition. The final fair value determination of the assets acquired and liabilities assumed will be completed prior to one year from the transaction completion date, consistent with Accounting Standards Codification (“ASC”) 805 Business Combinations ("ASC 805"). Measurement period adjustments will be recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed as of the acquisition date. Redeemable noncontrolling interest 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 both the Call Option and Put Option do not meet the definition of a derivative under ASC 815 Derivatives and Hedging 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 Arcadia’s operating results. 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 Company has also concluded that the noncontrolling interest is probable of redemption, as the only criteria for the security to become redeemable is the passage of time. As such, the Company has classified the redeemable noncontrolling interest separate from the stockholders’ equity section in the Condensed Consolidated Balance Sheets. At each balance sheet date subsequent to acquisition, the carrying value of the redeemable noncontrolling interest has been adjusted to its estimated redemption value as if redemption were to occur at the balance sheet date. This immediate adjustment is charged directly to retained earnings and therefore does not impact the Condensed Consolidated Statements of Operations or Comprehensive (Loss) Income. As of March 31, 2022, the Company’s estimated redemption value of the redeemable noncontrolling interest has not changed in comparison to our estimate at December 31, 2021 of $197,196. As such, during the three months ended March 31, 2022, the Company recorded an adjustment of the redeemable noncontrolling interest’s carrying value to its estimated redemption value of $5,717. In accordance with ASC 480, this adjustment occurs only after the Company ascribes net income or loss and any cash distributions attributable to the redeemable noncontrolling interest. Promissory Note In order to equalize after-tax consideration to the redeemable noncontrolling interest holder relative to an alternative transaction structure, immediately following the closing of the acquisition, the Company loaned approximately $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 by December 16, 2051 and has been recorded within “Other Assets”. Unaudited Pro Forma Financial Information Pro forma financial information is presented for informational purposes and is not intended to represent or be indicative of the actual results of operations of the combined business that would have been reported had the acquisition of Arcadia been completed at an earlier date, nor is it representative of future operating results of the Company. ASC 805 requires pro forma adjustments to reflect the effects of fair value adjustments, transaction costs, capital structure changes, the tax effects of such adjustments, and also requires nonrecurring adjustments to be prepared and presented. For the three months ended March 31, 2021, operating results have been adjusted to reflect (a) fair value adjustments related to incremental intangible asset amortization, (b) interest expense with the higher principal and interest rates associated with the Company's new term loan debt incurred to finance, in part, the acquisition of Arcadia, (c) the effects of integration costs on the results of Arcadia's operations, and (d) the effects of the adjustments on income taxes. The following unaudited pro forma combined financial information presents combined results of the Company and Arcadia. Arcadia’s operating results have been included in the Company’s operating results for the three months ended March 31, 2022. Three months ended March 31, 2021 As Reported Pro Forma Net sales $ 55,658 $ 112,899 Net income attributable to DMC Global Inc. stockholders $ 432 $ 4,353 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Significant cost elements included in inventory are material, labor, freight, subcontract costs, and manufacturing overhead. As necessary, we write down inventory to its net realizable value by recording provisions for excess, slow moving and obsolete inventory. We regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments. Inventories consisted of the following at March 31, 2022: Arcadia DynaEnergetics NobelClad DMC Global Inc. Raw materials $ 14,086 $ 14,003 $ 8,979 $ 37,068 Work-in-process 5,634 21,269 8,781 35,684 Finished goods 50,143 19,760 440 70,343 Supplies — — 209 209 Total inventories $ 69,863 $ 55,032 $ 18,409 $ 143,304 Inventories consisted of the following at December 31, 2021: Arcadia DynaEnergetics NobelClad DMC Global Inc. Raw materials $ 12,168 $ 15,209 $ 7,655 $ 35,032 Work-in-process 3,987 13,672 10,257 27,916 Finished goods 44,348 14,998 1,651 60,997 Supplies — — 269 269 Total inventories $ 60,503 $ 43,879 $ 19,832 $ 124,214 |
PURCHASED INTANGIBLE ASSETS
PURCHASED INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PURCHASED INTANGIBLE ASSETS | PURCHASED INTANGIBLE ASSETS Our purchased intangible assets consisted of the following as of March 31, 2022: Gross Accumulated Net Core technology $ 15,228 $ (13,989) $ 1,239 Customer relationships 246,034 (38,588) 207,446 Customer backlog 21,500 (9,214) 12,286 Trademarks / Trade names 23,981 (2,384) 21,597 Total intangible assets $ 306,743 $ (64,175) $ 242,568 Our purchased intangible assets consisted of the following as of December 31, 2021: Gross Accumulated Net Core technology $ 15,647 $ (14,209) $ 1,438 Customer relationships 246,718 (36,047) 210,671 Customer backlog 21,500 — 21,500 Trademarks / Trade names 24,037 (2,070) 21,967 Total intangible assets $ 307,902 $ (52,326) $ 255,576 The change in the gross value of our purchased intangible assets at March 31, 2022 from December 31, 2021 primarily 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 and NobelClad reporting units. After the goodwill associated with each reporting unit was impaired at December 31, 2015 and September 30, 2017, respectively, the tax amortization reduces other intangible assets related to the historical acquisition. |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT LIABILITIES | CONTRACT LIABILITIES At times, we require customers to make advance payments prior to the shipment of their orders in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. Contract liabilities were as follows: March 31, 2022 December 31, 2021 Arcadia $ 21,931 $ 14,697 NobelClad 4,879 5,881 DynaEnergetics 142 474 Total contract liabilities $ 26,952 $ 21,052 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASESThe Company leases real properties for use in manufacturing and as administrative and sales offices, and also 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. ROU assets are amortized on a straight-line basis to the Condensed Consolidated Statement of Operations. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease and non-lease components within the Company’s lease agreements are accounted for together. 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: March 31, 2022 December 31, 2021 ROU asset $ 50,934 $ 52,219 Current lease liability 6,287 6,126 Long-term lease liability 45,613 47,000 Total lease liability $ 51,900 $ 53,126 The ROU asset is reported in “ Other assets Other current liabilities Other long-term liabilities Arcadia leases certain office, manufacturing, distribution and warehouse facilities from entities affiliated with the redeemable noncontrolling interest holder and the President of Arcadia. There were eight related party leases in effect as of March 31, 2022, with expiration dates ranging from calendar years 2023 to 2031. As of March 31, 2022, the total ROU asset and related lease liability recognized for related party leases was $31,438 and $31,572, respectively. The Company believes that the lease terms for these properties are fair and reasonable to the Company and on terms comparable to those reasonably expected to be agreed to with independent third parties for similar types of property. For the three months ended March 31, 2022, operating lease expense was $2,767, inclusive of $1,156 related to related party leases. For the three months ended March 31, 2021, operating lease expense was $971. Short term and variable lease costs were not material for the three months ended March 31, 2022 and 2021. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of March 31, 2022 and December 31, 2021, outstanding borrowings consisted of the following: March 31, 2022 December 31, 2021 Syndicated credit agreement: U.S. Dollar revolving loan $ — $ — Term loan 146,250 150,000 Commerzbank line of credit — — Outstanding borrowings 146,250 150,000 Less: debt issuance costs (2,540) (2,575) Total debt 143,710 147,425 Less: current portion of long-term debt (15,000) (15,000) Long-term debt $ 128,710 $ 132,425 Syndicated Credit Agreement On December 23, 2021, we entered into a five-year $200,000 syndicated credit agreement (“credit facility”) 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 up to $50,000. The credit facility has an accordion feature to increase the commitments by $100,000 under the revolving loan class and/or by adding a term loan subject to approval by applicable lenders. We entered into the credit facility with a syndicate of four banks, with KeyBank, N.A. acting as administrative agent. The credit facility is secured by the assets of 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. Borrowings under the $150,000 Term Loan and $50,000 revolving loan limit can be in the form of Adjusted Daily Simple Secured Overnight Financing Rate ("SOFR") loans or one month Adjusted Term SOFR loans. Additionally, U.S. dollar borrowings on the revolving loan can be in the form of Base Rate loans (Base Rate borrowings are based on the greater of the administrative agent’s Prime rate, an adjusted Federal Funds rate or an adjusted SOFR rate). SOFR loans bear interest at the applicable SOFR rate plus an applicable margin (varying from 1.50% to 3.00%). Base Rate loans bear interest at the defined Base rate plus an applicable margin (varying from 0.50% to 2.00%). 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 additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified ratios. The leverage ratio is defined in the credit facility as the ratio of Consolidated Funded Indebtedness (as defined in the credit facility) on the last day of any trailing four quarter period to Consolidated Pro Forma EBITDA (as defined in the credit facility) for such period. The maximum leverage ratio permitted by our credit facility is 3.5 to 1.0 through the quarter ended March 31, 2022, 3.25 to 1.0 from the quarter ended June 30, 2022 through the quarter ended March 31, 2023, and 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 the preferred stock issued under the Operating Agreement), Consolidated Unfunded Capital Expenditures (as defined in the credit facility), and net cash income taxes to 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 March 31, 2022, 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 of €7,000 for our NobelClad and DynaEnergetics operations in Europe. This line of credit is also used to issue bank guarantees to customers to secure advance payments made by them. As of March 31, 2022 and December 31, 2021, we had no outstanding borrowings under this line of credit and bank guarantees of €2,609 and €2,997 were secured by the line of credit, respectively. 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 $2,540 and $2,575 as of March 31, 2022 and December 31, 2021, respectively. Deferred debt issuance costs are being amortized over the remaining term of the credit facility which expires on December 23, 2026. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate for each of the periods reported differs from the U.S. statutory rate primarily due to variation in contribution to consolidated pre-tax income 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, income or loss attributable to the redeemable noncontrolling interest holder, and changes to valuation allowances on our deferred tax assets. 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 months ended March 31, 2022 and March 31, 2021, we did not record any adjustments to previously established valuation allowances, except for adjustments related to the changes in balances of the related deferred tax assets. 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 adjustments. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Our business is organized into three segments: Arcadia, DynaEnergetics and NobelClad. In December 2021, DMC acquired a 60% controlling interest in Arcadia, a leading U.S. supplier of architectural building products, including storefronts and entrances, windows, curtain walls, doors and interior partitions for the commercial buildings market. Arcadia also supplies the luxury home market with highly engineered steel, aluminum and wood door and window systems. DynaEnergetics designs, manufactures and distributes products utilized by the global oil and gas industry principally to perforate oil and gas wells. NobelClad is a 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. 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 as follows: Three months ended March 31, 2022 2021 Net sales: Arcadia $ 67,968 $ — DynaEnergetics 48,887 38,172 NobelClad 21,861 17,486 Net sales $ 138,716 $ 55,658 Three months ended March 31, 2022 2021 (Loss) income before income taxes: Arcadia $ (2,443) $ — DynaEnergetics 3,298 1,521 NobelClad 705 1,604 Segment operating income 1,560 3,125 Unallocated corporate expenses (3,368) (2,227) Unallocated stock-based compensation* (2,102) (1,608) Other (expense) income, net (209) 394 Interest expense, net (1,024) (135) Loss before income taxes $ (5,143) $ (451) Three months ended March 31, 2022 2021 Depreciation and amortization: Arcadia $ 13,349 $ — DynaEnergetics 1,984 2,000 NobelClad 915 939 Segment depreciation and amortization 16,248 2,939 Corporate and other 87 83 Consolidated depreciation and amortization $ 16,335 $ 3,022 * Stock-based compensation is not allocated to wholly owned segments DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia segment as only 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. The disaggregation of revenue earned from contracts with customers based on the geographic location of the customer is as follows. For Arcadia, net sales have been presented consistent with regional definitions as provided by the American Institute of Architects. Arcadia Three Months Ended March 31, 2022 West $ 56,204 South 5,839 Northeast 3,217 Midwest 2,708 Total Arcadia $ 67,968 DynaEnergetics Three months ended March 31, 2022 2021 United States $ 38,743 $ 27,831 Canada 4,749 3,702 Egypt 1,004 1,053 Oman 928 781 Indonesia 342 571 India 230 393 Pakistan 100 509 Germany 99 314 Romania 50 322 Hong Kong 24 1,190 Rest of the world 2,618 1,506 Total DynaEnergetics $ 48,887 $ 38,172 NobelClad Three months ended March 31, 2022 2021 United States $ 9,155 $ 8,347 China 2,357 239 India 2,325 649 Canada 1,438 1,024 United Arab Emirates 998 664 Germany 587 390 Netherlands 491 591 Italy 413 435 France 351 669 Australia 325 578 South Korea 271 886 Norway 234 283 Spain 199 413 Russia* 196 1,021 Taiwan 19 278 Rest of the world 2,502 1,019 Total NobelClad $ 21,861 $ 17,486 *Future sales to Russia have been indefinitely suspended due to the ongoing conflict in Ukraine. During the three months ended March 31, 2022, no single customer accounted for greater than 10% of consolidated net sales. During the three months ended March 31, 2021, one customer in our DynaEnergetics segment accounted for approximately 10% of consolidated net sales. As of March 31, 2022 and December 31, 2021, no single customer accounted for greater than 10% of consolidated accounts receivable. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We are exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the U.S. dollar to euro, the U.S. dollar to the Canadian dollar, and, to a lesser extent, other currencies, arising from intercompany and third-party transactions entered into by our subsidiaries that are denominated in currencies other than their functional currency. Changes in exchange rates with respect to these transactions result in unrealized gains or losses if such transactions are unsettled at the end of the reporting period or realized gains or losses at settlement of the transaction. We use foreign currency forward contracts to offset foreign exchange rate fluctuations on foreign currency denominated asset and liability positions. None of these contracts are designated as accounting hedges, and all changes in the fair value of the forward contracts are recognized in “Other (expense) income, net” within our Condensed Consolidated Statements of Operations. We execute derivatives with a specialized foreign exchange brokerage firm as well as other large financial institutions. The primary credit risk inherent in derivative agreements is the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. We perform a review of the credit risk of our counterparties at the inception of the contract and on an ongoing basis. We anticipate that our counterparties will be able to fully satisfy their obligations under the agreements but will take action if doubt arises regarding the counterparties’ ability to perform. As of March 31, 2022 and December 31, 2021, the notional amounts of the forward currency contracts the Company held were $5,017 and $13,032, respectively. At March 31, 2022 and December 31, 2021, the fair values of outstanding foreign currency forward contracts were $0. The following table presents the location and amount of net (losses) income from hedging activities: Three months ended March 31, Derivative Statements of Operations Location 2022 2021 Foreign currency contracts Other (expense) income, net $ (127) $ 55 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
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. Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to 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 aggregate, a material adverse effect on our business, financial condition or operating results except as set forth below: Association of Apartment Owners of Poipu Point v. Arcadia, Inc., et. al . At the closing of the Arcadia acquisition, Arcadia was a defendant in a products liability matter brought by the Association of Apartment Owners of Poipu Point relating to Arcadia products sold to a project in Hawaii. The case is proceeding in the First Circuit, State of Hawaii. This matter relates to a product liability claim brought against Arcadia and others alleging that Arcadia windows and sliding glass doors have suffered significant deterioration and corrosion in ocean facing applications at a timeshare project at Poipu Point in Kauai, Hawaii. On January 22, 2022, the parties entered into a settlement agreement related to the case, which provided for the resolution of the case involving Arcadia in exchange for the payment of $4,300 by Arcadia. This amount was included within liabilities assumed at the date of acquisition. The settlement agreement was approved by the court on April 14, 2022, and payment of the settlement amount is due by May 13, 2022. It is anticipated that approximately $1,000 of the settlement amount will be paid by Arcadia’s insurance carriers. This amount was included within assets acquired at the date of acquisition. The remaining $3,300 will be funded by Arcadia. DMC obtained a purchase price reduction under the Equity Purchase Agreement for its share of the $3,300 relating to this matter. 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 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 also filed a letter with the California Labor and Workforce Department under California’s Private Attorneys General Act (“PAGA”). In February, the claims were amended to remove class action and individual claims in favor of arbitration on an individual, non-class basis, with the plaintiff also asserting representative claims under PAGA. The parties have agreed to stay the remaining PAGA claims pending the U.S. Supreme Court’s decision in Viking River Cruises, Inc. versus Moriana , which relates to the ability of plaintiffs to bring representative claims where a binding arbitration agreement exists. The Viking River case was argued in March, and the parties anticipate a ruling in the next few months. Plaintiff has not yet commenced arbitration of her individual claims. Mayorga v. Arcadia, Inc. This complaint was filed on November 15, 2021 in Los Angeles Superior Court. It purports to allege a 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 those asserted in the Felipe case but does not include One Stop as a defendant. As in Felipe , the plaintiff has amended his complaint to delete class action claims and any individual non-PAGA claims. Accordingly, Plaintiff’s complaint is now limited, like the Felipe complaint, to PAGA collective action claims. As in Felipe , Plaintiff has agreed to stay those PAGA claims pending the U.S. Supreme Court’s decision in Viking River Cruises, Inc. versus Moriana . Plaintiff has however commenced arbitration on a solely individual basis of his wage and hour claims. The arbitral body has appointed an arbitrator to adjudicate those claims, but no hearing or other dates have yet been set. Arcadia intends to vigorously defend against both 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 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of DMC Global Inc. (“DMC”, “we”, “us”, “our”, or the “Company”) and its controlled subsidiaries. Only subsidiaries in which controlling interests are maintained are consolidated. All significant intercompany accounts, profits, and transactions have been eliminated in consolidation. |
Accounts and Notes Receivable | Accounts and Notes Receivable The Company measures expected credit losses for its accounts receivable using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company has disaggregated pools of accounts receivable balances by business, geography and/or customer risk profile and has used history and other experience to establish an allowance for credit losses at the time the receivable is recognized. To measure expected credit losses, we have elected to pool trade receivables by segment and analyze each segment’s accounts receivable balances as separate populations. Within each segment, receivables exhibit similar risk characteristics. |
Revenue Recognition | Revenue Recognition The Company’s revenues are primarily derived from consideration paid by customers for tangible goods. The Company analyzes its different goods by segment to determine the appropriate basis for revenue recognition. Revenue is not generated from sources other than contracts with customers and revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. There are no material upfront costs for operations that are incurred from contracts with customers. 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 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. Please refer to Note 6 "Contract Liabilities" for further information on contract liabilities and Note 10 "Business Segments" for disaggregated revenue disclosures. See additional revenue recognition policy disclosures specific to the DynaEnergetics and NobelClad business segments within our Annual Report filed on Form 10-K for the year ended December 31, 2021. Arcadia Customers agree to terms and conditions at the time of initiating an order. The significant majority of transactions contain standard architectural building materials that are not made-to-order, which include storefronts and entrances, windows, curtain walls, doors and interior partitions. In instances where multiple products are included within an order, each product represents a separate performance obligation given that: (1) the customer can benefit from each product on a standalone basis and (2) each product is distinct within the context of the contract. The transaction price is readily determinable and fixed at the time the transaction is entered into with the customer. Arcadia is entitled to each product’s transaction price upon the customer obtaining control of the item. For standard architectural building materials that are not made-to-order, such control transfers at a point in time, which is generally when the product has been delivered to the customer and the legal title has been transferred. Upon delivery and title transfer, Arcadia has performed its contractual requirements such that it has a present right to payment, and the customer from that point forward bears all risks and rewards of ownership. In addition, at this date, the customer has the ability to direct the use of, or restrict access to, the asset. Payment discounts, rebates, refunds, or any other forms of variable consideration are typically not included within Arcadia contracts. For contracts that contain only one performance obligation, the total transaction price is allocated to the sole performance obligation. For contracts which contain multiple distinct performance obligations, judgment is required to determine the standalone selling price (“SSP”) for each performance obligation. However, such judgment is largely mitigated given that standard architectural building materials purchased are generally shipped at the same time. In instances where products purchased are not shipped at the same time, Arcadia uses the contractually stated price to determine SSP as this price approximates the price of each good as sold separately. At times, Arcadia will also contract with customers to supply customized architectural building materials based on design specifications, measurements, finishes, framing materials, and other options selected by the customer at the time an order is initiated. For these contracts, Arcadia has an enforceable right to payment from its customers at the time an order is received and accepted for all manufacturing efforts expended on behalf of its customers. Due to the customized nature of these products, the Company has concluded that the substantial portion of the related goods produced have no alternative use, and therefore control of these products passes to the customer over time. We have concluded that recognizing revenue utilizing an over-time output method based upon units delivered reasonably depicts the fulfillment of our performance obligations under our contracts and the value received by the customer based upon our performance to date. This conclusion is further supported by the frequency of shipments in fulfilling these contracts. We have elected not to disclose our unsatisfied performance obligations as of March 31, 2022 under the short-term contract exemption as we expect such performance obligations will be satisfied within the next 12 months following the end of the reporting period. |
Income Taxes | Income Taxes We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax basis 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 is 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 that it 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 to be realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense. |
Earnings Per Share | Earnings Per Share In periods with net income, the Company computes earnings per share (“EPS”) using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared and participation rights in undistributed earnings. Restricted stock awards 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. |
Deferred Compensation | Deferred compensation The Company maintains a Non-Qualified Deferred Compensation Plan (the “Plan”) as part of its overall compensation package for certain employees. Participants are eligible to defer a portion of their annual salary, their annual incentive bonus, and their equity awards through the Plan on a tax-deferred basis. Deferrals into the Plan 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 be settled either by delivery of a fixed number of shares of DMC’s common stock or in cash, in accordance with participant contributions and elections. For deferred equity awards, subsequent to equity award vesting and after a period prescribed by the Plan, participants can elect to diversify contributions of equity awards into other investment options available to Plan participants. If diversified, these contributions will be subsequently settled by delivery of cash. The Company has established a grantor trust commonly known as a “rabbi trust” and contributed certain assets to satisfy the future obligations to participants in the Plan. These assets are subject to potential claims of the Company’s general creditors. The assets held in the trust include unvested restricted stock awards (“RSAs”), vested company stock awards, company-owned life insurance (“COLI”) on certain 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. |
Fair Value of Financial Instruments | 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 accounts receivable and payable, accrued expenses, and the revolving loans and term loan under our credit facility, when outstanding, approximate their fair value. Our revolving loans and term loan under our credit facility, when outstanding, reset each month at market interest rates. As a result, we classify these liabilities as Level 1 in the fair value hierarchy. 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 classify these instruments as Level 2 in the fair value hierarchy. Money market funds and mutual funds of $9,430 as of March 31, 2022 and $9,083 as of December 31, 2021 held to satisfy future deferred compensation obligations are valued based upon the market values of underlying securities, and therefore we classify these assets as Level 2 in the fair value hierarchy. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board issued a new accounting standard which provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions apply only to contracts and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The Company will adopt this standard when LIBOR is discontinued; however, given that we do not have significant exposure to LIBOR or other referenced rates expected to be discontinued, we do not believe that adoption of this standard will have a material impact on our Consolidated Financial Statements. |
Inventories | Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Significant cost elements included in inventory are material, labor, freight, subcontract costs, and manufacturing overhead. As necessary, we write down inventory to its net realizable value by recording provisions for excess, slow moving and obsolete inventory. 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. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Credit Losses on Receivables | 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, 2021 $ — $ 2,758 $ 15 $ 2,773 Current period provision for expected credit losses $ 11 16 — 27 Recoveries of amounts previously reserved $ — (47) — (47) Impacts of foreign currency exchange rates and other $ — (1) — (1) Allowance for doubtful accounts, March 31, 2022 $ 11 $ 2,726 $ 15 $ 2,752 |
Schedule of Computation and Reconciliation of Earnings Per Common Share | For the applicable periods presented, diluted EPS using the treasury stock method was less dilutive than the two-class method; as such, only the two-class method has been included below. Three months ended March 31, 2022 2021 Net (loss) income attributable to DMC Global Inc. stockholders, as reported $ (3,288) $ 432 Less: Adjustment of redeemable noncontrolling interest (5,717) — Less: Undistributed net income available to participating securities — (5) Numerator for basic net (loss) income per share: (9,005) 427 Add: Undistributed net income allocated to participating securities — 5 Less: Undistributed net income reallocated to participating securities — (5) Numerator for diluted net (loss) income per share: (9,005) 427 Denominator: Weighted average shares outstanding for basic net (loss) income per share 19,301,126 15,453,103 Effect of dilutive securities (1) — 10,820 Weighted average shares outstanding for diluted net (loss) income per share 19,301,126 15,463,923 Net (loss) income per share Basic $ (0.47) $ 0.03 Diluted $ (0.47) $ 0.03 (1) For the three months ended March 31, 2022, 14,069 shares have been excluded as their effect would have been anti-dilutive. |
Schedule of Defined Compensation Plan | The balances related to the deferred compensation plan were as follows: Balance Sheet location March 31, 2022 December 31, 2021 Deferred compensation assets Other assets $ 13,973 $ 13,812 Deferred compensation obligations Other long-term liabilities $ 15,516 $ 15,944 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Preliminary Measurement Period Adjustments Preliminary December 23, 2021 March 31, 2022 Cash, including cash acquired (1) $ 268,654 $ (640) $ 268,014 Equity (2) 21,716 — 21,716 Total fair value of consideration transferred 290,370 (640) 289,730 Assets acquired: Cash and cash equivalents $ 7,654 $ — $ 7,654 Accounts receivable 31,456 — 31,456 Inventories 60,503 — 60,503 Prepaid expenses and other 2,438 — 2,438 Property, plant and equipment (3) 17,323 — 17,323 Goodwill (4) 141,266 (1,032) 140,234 Intangible assets (5) 254,500 — 254,500 Other long-term assets 122 (35) 87 Total assets acquired 515,262 (1,067) 514,195 Liabilities assumed: Accounts payable 8,792 — 8,792 Other current liabilities 22,520 — 22,520 Total liabilities assumed 31,312 — 31,312 Redeemable noncontrolling interest (6) 193,580 (427) 193,153 Total assets acquired and liabilities assumed $ 290,370 $ (640) $ 289,730 (1) Cash sources of funding included $150,000 in new term loan debt and $118,654 of cash and marketable securities on hand. During the quarter ended March 31, 2022, working capital estimates at the time of acquisition were finalized. In April 2022, $640 was returned to the Company from the funds previously placed into escrow. (2) Equity consideration included 551,458 shares of DMC common stock. (3) Property, plant and equipment primarily consists of the following: Land $ 2,922 Buildings and improvements 4,015 Manufacturing equipment and tooling 9,877 Furniture, fixtures, and computer equipment 95 Other 414 Total property, plant and equipment 17,323 The useful lives of the property, plant and equipment is consistent with the Company's accounting policies. (4) Amounts recorded for goodwill resulting in a tax basis step-up are generally expected to be deductible for tax purposes. Tax deductible goodwill is estimated to be $85,815. (5) Intangible assets consist of $211,000 of customer relationships, $22,000 of trade name, and $21,500 of customer backlog. |
Schedule of Pro Forma Information | The following unaudited pro forma combined financial information presents combined results of the Company and Arcadia. Arcadia’s operating results have been included in the Company’s operating results for the three months ended March 31, 2022. Three months ended March 31, 2021 As Reported Pro Forma Net sales $ 55,658 $ 112,899 Net income attributable to DMC Global Inc. stockholders $ 432 $ 4,353 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventory | Inventories consisted of the following at March 31, 2022: Arcadia DynaEnergetics NobelClad DMC Global Inc. Raw materials $ 14,086 $ 14,003 $ 8,979 $ 37,068 Work-in-process 5,634 21,269 8,781 35,684 Finished goods 50,143 19,760 440 70,343 Supplies — — 209 209 Total inventories $ 69,863 $ 55,032 $ 18,409 $ 143,304 Inventories consisted of the following at December 31, 2021: Arcadia DynaEnergetics NobelClad DMC Global Inc. Raw materials $ 12,168 $ 15,209 $ 7,655 $ 35,032 Work-in-process 3,987 13,672 10,257 27,916 Finished goods 44,348 14,998 1,651 60,997 Supplies — — 269 269 Total inventories $ 60,503 $ 43,879 $ 19,832 $ 124,214 |
PURCHASED INTANGIBLE ASSETS (Ta
PURCHASED INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Purchased Intangible Assets, Other Than Goodwill | Our purchased intangible assets consisted of the following as of March 31, 2022: Gross Accumulated Net Core technology $ 15,228 $ (13,989) $ 1,239 Customer relationships 246,034 (38,588) 207,446 Customer backlog 21,500 (9,214) 12,286 Trademarks / Trade names 23,981 (2,384) 21,597 Total intangible assets $ 306,743 $ (64,175) $ 242,568 Our purchased intangible assets consisted of the following as of December 31, 2021: Gross Accumulated Net Core technology $ 15,647 $ (14,209) $ 1,438 Customer relationships 246,718 (36,047) 210,671 Customer backlog 21,500 — 21,500 Trademarks / Trade names 24,037 (2,070) 21,967 Total intangible assets $ 307,902 $ (52,326) $ 255,576 |
CONTRACT LIABILITIES (Tables)
CONTRACT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Liabilities | Contract liabilities were as follows: March 31, 2022 December 31, 2021 Arcadia $ 21,931 $ 14,697 NobelClad 4,879 5,881 DynaEnergetics 142 474 Total contract liabilities $ 26,952 $ 21,052 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Assets and Liabilities | 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: March 31, 2022 December 31, 2021 ROU asset $ 50,934 $ 52,219 Current lease liability 6,287 6,126 Long-term lease liability 45,613 47,000 Total lease liability $ 51,900 $ 53,126 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Lines of Credit | As of March 31, 2022 and December 31, 2021, outstanding borrowings consisted of the following: March 31, 2022 December 31, 2021 Syndicated credit agreement: U.S. Dollar revolving loan $ — $ — Term loan 146,250 150,000 Commerzbank line of credit — — Outstanding borrowings 146,250 150,000 Less: debt issuance costs (2,540) (2,575) Total debt 143,710 147,425 Less: current portion of long-term debt (15,000) (15,000) Long-term debt $ 128,710 $ 132,425 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information is as follows: Three months ended March 31, 2022 2021 Net sales: Arcadia $ 67,968 $ — DynaEnergetics 48,887 38,172 NobelClad 21,861 17,486 Net sales $ 138,716 $ 55,658 Three months ended March 31, 2022 2021 (Loss) income before income taxes: Arcadia $ (2,443) $ — DynaEnergetics 3,298 1,521 NobelClad 705 1,604 Segment operating income 1,560 3,125 Unallocated corporate expenses (3,368) (2,227) Unallocated stock-based compensation* (2,102) (1,608) Other (expense) income, net (209) 394 Interest expense, net (1,024) (135) Loss before income taxes $ (5,143) $ (451) Three months ended March 31, 2022 2021 Depreciation and amortization: Arcadia $ 13,349 $ — DynaEnergetics 1,984 2,000 NobelClad 915 939 Segment depreciation and amortization 16,248 2,939 Corporate and other 87 83 Consolidated depreciation and amortization $ 16,335 $ 3,022 * Stock-based compensation is not allocated to wholly owned segments DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia segment as only 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. |
Disaggregation of Revenue | The disaggregation of revenue earned from contracts with customers based on the geographic location of the customer is as follows. For Arcadia, net sales have been presented consistent with regional definitions as provided by the American Institute of Architects. Arcadia Three Months Ended March 31, 2022 West $ 56,204 South 5,839 Northeast 3,217 Midwest 2,708 Total Arcadia $ 67,968 DynaEnergetics Three months ended March 31, 2022 2021 United States $ 38,743 $ 27,831 Canada 4,749 3,702 Egypt 1,004 1,053 Oman 928 781 Indonesia 342 571 India 230 393 Pakistan 100 509 Germany 99 314 Romania 50 322 Hong Kong 24 1,190 Rest of the world 2,618 1,506 Total DynaEnergetics $ 48,887 $ 38,172 NobelClad Three months ended March 31, 2022 2021 United States $ 9,155 $ 8,347 China 2,357 239 India 2,325 649 Canada 1,438 1,024 United Arab Emirates 998 664 Germany 587 390 Netherlands 491 591 Italy 413 435 France 351 669 Australia 325 578 South Korea 271 886 Norway 234 283 Spain 199 413 Russia* 196 1,021 Taiwan 19 278 Rest of the world 2,502 1,019 Total NobelClad $ 21,861 $ 17,486 *Future sales to Russia have been indefinitely suspended due to the ongoing conflict in Ukraine. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments, Gain (Loss) | The following table presents the location and amount of net (losses) income from hedging activities: Three months ended March 31, Derivative Statements of Operations Location 2022 2021 Foreign currency contracts Other (expense) income, net $ (127) $ 55 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable, allowance for credit loss, net recoveries | $ 20 | |
Deferred compensation, mutual funds held by the trust | 13,973 | $ 13,812 |
Level 1 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred compensation, mutual funds held by the trust | $ 9,430 | $ 9,083 |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Payment terms, period | 30 days | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Payment terms, period | 90 days | |
Variable Interest Entity | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Notes receivable, term | 5 years | |
Notes receivable, current | $ 974 | |
Notes receivable, noncurrent | 8,768 | |
DynaEnergetics | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Provisions of accounts receivable credit loss, unrecorded | $ 1,237 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Rollforward of Allowance for Doubtful Accounts (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Allowance for doubtful accounts, December 31, 2021 | $ 2,773 |
Current period provision for expected credit losses | 27 |
Recoveries of amounts previously reserved | (47) |
Impacts of foreign currency exchange rates and other | (1) |
Allowance for doubtful accounts, March 31, 2022 | 2,752 |
Arcadia | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Allowance for doubtful accounts, December 31, 2021 | 0 |
Current period provision for expected credit losses | 11 |
Recoveries of amounts previously reserved | 0 |
Impacts of foreign currency exchange rates and other | 0 |
Allowance for doubtful accounts, March 31, 2022 | 11 |
DynaEnergetics | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Allowance for doubtful accounts, December 31, 2021 | 2,758 |
Current period provision for expected credit losses | 16 |
Recoveries of amounts previously reserved | (47) |
Impacts of foreign currency exchange rates and other | (1) |
Allowance for doubtful accounts, March 31, 2022 | 2,726 |
NobelClad | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Allowance for doubtful accounts, December 31, 2021 | 15 |
Current period provision for expected credit losses | 0 |
Recoveries of amounts previously reserved | 0 |
Impacts of foreign currency exchange rates and other | 0 |
Allowance for doubtful accounts, March 31, 2022 | $ 15 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share Reconciliation [Abstract] | ||
Net (loss) income attributable to DMC Global Inc. stockholders, as reported | $ (3,288) | $ 432 |
Less: Adjustment of redeemable noncontrolling interest | (5,717) | 0 |
Less: Undistributed net income available to participating securities | 0 | (5) |
Numerator for basic net (loss) income per share: | (9,005) | 427 |
Add: Undistributed net income allocated to participating securities | 0 | 5 |
Less: Undistributed net income reallocated to participating securities | 0 | (5) |
Numerator for diluted net (loss) income per share: | $ (9,005) | $ 427 |
Denominator: | ||
Weighted average shares outstanding for basic net (loss) income per share (in shares) | 19,301,126 | 15,453,103 |
Effect of dilutive securities (in shares) | 0 | 10,820 |
Weighted average shares outstanding for diluted net (loss) income per share (in shares) | 19,301,126 | 15,463,923 |
Net (loss) income per share | ||
Basic (in dollars per share) | $ (0.47) | $ 0.03 |
Diluted (in dollars per share) | $ (0.47) | $ 0.03 |
Anti-dilutive securities (in shares) | 14,069 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Deferred Compensation Plan (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Deferred compensation assets | $ 13,973 | $ 13,812 |
Deferred compensation obligations | $ 15,516 | $ 15,944 |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 23, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Redeemable noncontrolling interest | $ 197,196 | $ 197,196 | |
Adjustment of redeemable noncontrolling interest to redemption value | 5,717 | ||
Redeemable Noncontrolling Interest Holder | |||
Business Acquisition [Line Items] | |||
Notes receivable to redeemable NCI holder | $ 24,902 | ||
Arcadia | |||
Business Acquisition [Line Items] | |||
Percentage of ownership acquired | 60.00% | 60.00% | |
Acquisition of business, net of cash acquired | $ 261 | ||
Cash acquired from acquisition | $ 7,654 | ||
Business acquisition, equity interest issued or issuable, number of shares (in shares) | 551,458 | ||
Business acquisition, share price (in dollars per share ) | $ 0.05 | ||
Redeemable noncontrolling interest | $ 193,580 | $ 193,153 |
BUSINESS COMBINATION - Assets A
BUSINESS COMBINATION - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 23, 2021 | Mar. 31, 2022 | Apr. 30, 2022 | Dec. 31, 2021 |
Assets acquired: | |||||
Goodwill | $ 140,234 | $ 140,234 | $ 141,266 | ||
Liabilities assumed: | |||||
Redeemable noncontrolling interest | 197,196 | 197,196 | $ 197,196 | ||
Arcadia | |||||
Business Acquisition [Line Items] | |||||
Cash, including cash acquired | 268,014 | $ 268,654 | |||
Equity | 21,716 | 21,716 | |||
Total fair value of consideration transferred | 289,730 | 290,370 | |||
Assets acquired: | |||||
Cash and cash equivalents | 7,654 | 7,654 | 7,654 | ||
Accounts receivable | 31,456 | 31,456 | 31,456 | ||
Inventories | 60,503 | 60,503 | 60,503 | ||
Prepaid expenses and other | 2,438 | 2,438 | 2,438 | ||
Property, plant and equipment | 17,323 | 17,323 | 17,323 | ||
Goodwill | 140,234 | 141,266 | 140,234 | ||
Intangible assets | 254,500 | 254,500 | 254,500 | ||
Other long-term assets | 87 | 122 | 87 | ||
Total assets acquired | 514,195 | 515,262 | 514,195 | ||
Liabilities assumed: | |||||
Accounts payable | 8,792 | 8,792 | 8,792 | ||
Other current liabilities | 22,520 | 22,520 | 22,520 | ||
Total liabilities assumed | 31,312 | 31,312 | 31,312 | ||
Redeemable noncontrolling interest | 193,153 | 193,580 | 193,153 | ||
Total assets acquired and liabilities assumed | $ 289,730 | 290,370 | 289,730 | ||
Measurement Period Adjustments | |||||
Cash, including cash acquired | (640) | ||||
Total fair value of consideration transferred | (640) | ||||
Assets acquired: | |||||
Goodwill | (1,032) | ||||
Other long-term assets | (35) | ||||
Total assets acquired | (1,067) | ||||
Redeemable noncontrolling interest | (427) | ||||
Total assets acquired and liabilities assumed | $ (640) | ||||
Business consideration, term loan debt issued | 150,000 | ||||
Consideration transferred, cash and marketable securities | $ 118,654 | ||||
Business acquisition, equity interest issued or issuable, number of shares (in shares) | 551,458 | ||||
Goodwill acquired that is expected to be tax deductible | $ 85,815 | ||||
Percentage of redeemable noncontrolling interest acquired | 40.00% | ||||
Arcadia | Subsequent Event | |||||
Assets acquired: | |||||
Escrow deposit | $ 640 | ||||
Arcadia | Customer relationships | |||||
Assets acquired: | |||||
Finite-lived Intangible assets | $ 211,000 | ||||
Arcadia | Trade Names | |||||
Assets acquired: | |||||
Finite-lived Intangible assets | 22,000 | ||||
Arcadia | Customer backlog | |||||
Assets acquired: | |||||
Finite-lived Intangible assets | 21,500 | ||||
Arcadia | Land | |||||
Assets acquired: | |||||
Property, plant and equipment | 2,922 | ||||
Arcadia | Buildings and improvements | |||||
Assets acquired: | |||||
Property, plant and equipment | 4,015 | ||||
Arcadia | Manufacturing equipment and tooling | |||||
Assets acquired: | |||||
Property, plant and equipment | 9,877 | ||||
Arcadia | Furniture, fixtures, and computer equipment | |||||
Assets acquired: | |||||
Property, plant and equipment | 95 | ||||
Arcadia | Other | |||||
Assets acquired: | |||||
Property, plant and equipment | $ 414 |
BUSINESS COMBINATION - Schedule
BUSINESS COMBINATION - Schedule of Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||
Net sales | $ 138,716 | $ 55,658 |
Net income attributable to DMC Global Inc. stockholders | (3,288) | $ 432 |
Arcadia | ||
Business Acquisition [Line Items] | ||
Net sales | 112,899 | |
Net income attributable to DMC Global Inc. stockholders | $ 4,353 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||
Raw materials | $ 37,068 | $ 35,032 |
Work-in-process | 35,684 | 27,916 |
Finished goods | 70,343 | 60,997 |
Supplies | 209 | 269 |
Total inventories | 143,304 | 124,214 |
Arcadia | ||
Inventory [Line Items] | ||
Raw materials | 14,086 | 12,168 |
Work-in-process | 5,634 | 3,987 |
Finished goods | 50,143 | 44,348 |
Supplies | 0 | 0 |
Total inventories | 69,863 | 60,503 |
DynaEnergetics | ||
Inventory [Line Items] | ||
Raw materials | 14,003 | 15,209 |
Work-in-process | 21,269 | 13,672 |
Finished goods | 19,760 | 14,998 |
Supplies | 0 | 0 |
Total inventories | 55,032 | 43,879 |
NobelClad | ||
Inventory [Line Items] | ||
Raw materials | 8,979 | 7,655 |
Work-in-process | 8,781 | 10,257 |
Finished goods | 440 | 1,651 |
Supplies | 209 | 269 |
Total inventories | $ 18,409 | $ 19,832 |
PURCHASED INTANGIBLE ASSETS (De
PURCHASED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Purchased intangible assets | ||
Gross | $ 306,743 | $ 307,902 |
Accumulated Amortization | (64,175) | (52,326) |
Net | 242,568 | 255,576 |
Core technology | ||
Purchased intangible assets | ||
Gross | 15,228 | 15,647 |
Accumulated Amortization | (13,989) | (14,209) |
Net | 1,239 | 1,438 |
Customer relationships | ||
Purchased intangible assets | ||
Gross | 246,034 | 246,718 |
Accumulated Amortization | (38,588) | (36,047) |
Net | 207,446 | 210,671 |
Customer backlog | ||
Purchased intangible assets | ||
Gross | 21,500 | 21,500 |
Accumulated Amortization | (9,214) | 0 |
Net | 12,286 | 21,500 |
Trademarks / Trade names | ||
Purchased intangible assets | ||
Gross | 23,981 | 24,037 |
Accumulated Amortization | (2,384) | (2,070) |
Net | $ 21,597 | $ 21,967 |
CONTRACT LIABILITIES (Details)
CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 26,952 | $ 21,052 |
Arcadia | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | 21,931 | 14,697 |
NobelClad | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | 4,879 | 5,881 |
DynaEnergetics | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 142 | $ 474 |
LEASES - ROU Asset and Lease Li
LEASES - ROU Asset and Lease Liability Balances (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
ROU asset | $ 50,934 | $ 52,219 |
Current lease liability | 6,287 | 6,126 |
Long-term lease liability | 45,613 | 47,000 |
Total lease liability | $ 51,900 | $ 53,126 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)lease | Mar. 31, 2021USD ($) | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other long-term liabilities | Other long-term liabilities | |
Number of leases | lease | 8 | ||
Operating lease cost | $ 2,767 | $ 971 | |
Operating Leases | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease expenses from related party leases | 1,156 | ||
Arcadia | |||
Lessee, Lease, Description [Line Items] | |||
ROU assets acquired | 31,438 | ||
Operating lease liabilities assumed | $ 31,572 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 146,250 | $ 150,000 | |
Less: debt issuance costs | (2,540) | (2,575) | $ (2,575) |
Total debt | 143,710 | 147,425 | |
Less: current portion of long-term debt | (15,000) | (15,000) | |
Long-term debt | 128,710 | 132,425 | |
Commerzbank Line of Credit | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 0 | 0 | |
Revolving Credit Facility | Syndicated Credit Facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 0 | 0 | |
Secured Debt | Syndicated Credit Facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 146,250 | $ 150,000 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Dec. 23, 2021USD ($)bank | Mar. 31, 2022USD ($) | Mar. 31, 2022EUR (€) | Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | Mar. 31, 2021USD ($) | Jul. 31, 2020EUR (€) |
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | $ 146,250,000 | $ 150,000,000 | |||||
Debt issuance costs | 2,540,000 | 2,575,000 | $ 2,575,000 | ||||
Syndicated Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | 0 | 0 | |||||
Syndicated Credit Facility | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | 146,250,000 | 150,000,000 | |||||
Commerzbank Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | $ 0 | $ 0 | |||||
Credit Facility | Syndicated Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, term | 5 years | ||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||
Amortization of principal, percent | 10.00% | ||||||
Accordion feature | $ 100,000,000 | ||||||
Credit agreement, number of banks | bank | 4 | ||||||
Debt instrument, covenant, debt service coverage ratio | 1.35 | ||||||
Credit Facility | Syndicated Credit Facility | Through Quarter Ended March 31, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum leverage ratio | 3.5 | ||||||
Credit Facility | Syndicated Credit Facility | Quarter Ended June 30, 2022 Through Quarter March 31, 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum leverage ratio | 3.25 | ||||||
Credit Facility | Syndicated Credit Facility | Quarter Ended June 30, 2023 And Thereafter | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum leverage ratio | 3 | ||||||
Credit Facility | Syndicated Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||
Credit Facility | Syndicated Credit Facility | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||
Credit Facility | Alternate Currencies Revolving Loan | Minimum | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate | 1.50% | ||||||
Credit Facility | Alternate Currencies Revolving Loan | Minimum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate | 0.50% | ||||||
Credit Facility | Alternate Currencies Revolving Loan | Maximum | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate | 3.00% | ||||||
Credit Facility | Alternate Currencies Revolving Loan | Maximum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable interest rate | 2.00% | ||||||
Credit Facility | German Bank Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | € | € 7,000,000 | ||||||
Credit Facility | Commerzbank Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | € | € 0 | € 0 | |||||
Amount of bank guarantees secured by line of credit | € | € 2,609,000 | € 2,997,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Minimum | |
Operating Loss Carryforwards [Line Items] | |
Differences between U.S. and foreign tax rates, range | 20.00% |
Maximum | |
Operating Loss Carryforwards [Line Items] | |
Differences between U.S. and foreign tax rates, range | 33.00% |
BUSINESS SEGMENTS - Segment Inf
BUSINESS SEGMENTS - Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 23, 2021 | |
Segment information | |||
Number of segments | segment | 3 | ||
Net sales | $ 138,716 | $ 55,658 | |
Segment operating income | (3,910) | (710) | |
Other (expense) income, net | (209) | 394 | |
Interest expense, net | (1,024) | (135) | |
Loss before income taxes | (5,143) | (451) | |
Depreciation and amortization: | $ 16,335 | 3,022 | |
Share-based payment arrangement, expense, allocation percentage by noncontrolling owners | 40.00% | ||
Arcadia | |||
Segment information | |||
Percentage of ownership acquired | 60.00% | 60.00% | |
Operating Segments | |||
Segment information | |||
Segment operating income | $ 1,560 | 3,125 | |
Depreciation and amortization: | 16,248 | 2,939 | |
Segment Reconciling Items | |||
Segment information | |||
Unallocated corporate expenses | (3,368) | (2,227) | |
Unallocated stock-based compensation | (2,102) | (1,608) | |
Other (expense) income, net | (209) | 394 | |
Interest expense, net | (1,024) | (135) | |
Corporate and other | |||
Segment information | |||
Depreciation and amortization: | 87 | 83 | |
Arcadia | |||
Segment information | |||
Net sales | $ 67,968 | $ 0 | |
Share-based payment arrangement, expense, allocation percentage by parent | 60.00% | ||
Share-based payment arrangement, expense, allocation percentage by noncontrolling owners | 40.00% | ||
Arcadia | Operating Segments | |||
Segment information | |||
Segment operating income | $ (2,443) | $ 0 | |
Depreciation and amortization: | 13,349 | 0 | |
DynaEnergetics | |||
Segment information | |||
Net sales | 48,887 | 38,172 | |
DynaEnergetics | Operating Segments | |||
Segment information | |||
Segment operating income | 3,298 | 1,521 | |
Depreciation and amortization: | 1,984 | 2,000 | |
NobelClad | |||
Segment information | |||
Net sales | 21,861 | 17,486 | |
NobelClad | Operating Segments | |||
Segment information | |||
Segment operating income | 705 | 1,604 | |
Depreciation and amortization: | $ 915 | $ 939 |
BUSINESS SEGMENTS - Disaggregat
BUSINESS SEGMENTS - Disaggregation of Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 138,716 | $ 55,658 |
Arcadia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 67,968 | 0 |
Arcadia | West | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 56,204 | |
Arcadia | South | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 5,839 | |
Arcadia | Northeast | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 3,217 | |
Arcadia | Midwest | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,708 | |
DynaEnergetics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 48,887 | $ 38,172 |
DynaEnergetics | Customer Concentration Risk | Revenue from Contract with Customer Benchmark | One Customer | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 10.00% | |
DynaEnergetics | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 38,743 | $ 27,831 |
DynaEnergetics | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,749 | 3,702 |
DynaEnergetics | Egypt | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,004 | 1,053 |
DynaEnergetics | Oman | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 928 | 781 |
DynaEnergetics | Indonesia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 342 | 571 |
DynaEnergetics | India | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 230 | 393 |
DynaEnergetics | Pakistan | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 100 | 509 |
DynaEnergetics | Germany | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 99 | 314 |
DynaEnergetics | Romania | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 50 | 322 |
DynaEnergetics | Hong Kong | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 24 | 1,190 |
DynaEnergetics | Rest of the world | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,618 | 1,506 |
NobelClad | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 21,861 | 17,486 |
NobelClad | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 9,155 | 8,347 |
NobelClad | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,438 | 1,024 |
NobelClad | India | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,325 | 649 |
NobelClad | Germany | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 587 | 390 |
NobelClad | China | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,357 | 239 |
NobelClad | United Arab Emirates | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 998 | 664 |
NobelClad | Netherlands | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 491 | 591 |
NobelClad | Italy | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 413 | 435 |
NobelClad | France | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 351 | 669 |
NobelClad | Australia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 325 | 578 |
NobelClad | South Korea | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 271 | 886 |
NobelClad | Norway | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 234 | 283 |
NobelClad | Spain | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 199 | 413 |
NobelClad | Russia | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 196 | 1,021 |
NobelClad | Taiwan | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 19 | 278 |
NobelClad | Rest of the world | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 2,502 | $ 1,019 |
DERIVATIVE INSTRUMENTS - Narrat
DERIVATIVE INSTRUMENTS - Narrative (Details) - Foreign Exchange Forward - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 5,017,000 | $ 13,032,000 |
Fair value of outstanding foreign currency forward | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS - Gain_(
DERIVATIVE INSTRUMENTS - Gain/(Loss) Recognized in Income on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Foreign currency contracts | Other (expense) income, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on foreign currency contracts | $ (127) | $ 55 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Jan. 22, 2022 | Dec. 23, 2021 |
Product Liability Contingency [Line Items] | ||
Payment for legal settlements | $ 4,300 | |
Arcadia | ||
Product Liability Contingency [Line Items] | ||
Purchase price reduction under business acquisition | $ 3,300 | |
Arcadia's Insurance Carriers | ||
Product Liability Contingency [Line Items] | ||
Payment for legal settlements | 1,000 | |
Arcadia | ||
Product Liability Contingency [Line Items] | ||
Payment for legal settlements | $ 3,300 |