BOOM - Earnings call transcript Q2 2022

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Operator

Good day, ladies and gentlemen. And welcome to the DMC Global Second Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions-and-comments after the presentation. It is now my pleasure to turn the floor over to your host, Geoff High, Vice President of Investor Relations. Sir, the floor is yours.

Geoff High

Hello. second call. DMC’s to welcome quarter conference And Presenting CFO, Mike President and Longe; and CEO, Kevin Kuta. today are I’d like are on to call remind risks SEC. today’s everyone that matters subject are our forward-looking and as to that filings date, projections the and may uncertainties discussed statements are in estimates, based that our and assumptions of disclosed include during this with

statements. to results anticipated of is replay subject become certain assumes forward-looking to in the be will materially business could that actual today’s at risks of to Our cause subsequent obligation dmcglobal.com call. those differ from our statements webcast update after DMC no that call available events. forward-looking A because untrue

after available Details replay will In to to Longe. the today’s the in now listening over Kevin addition, with telephone two Kevin? call. turn will a for that, are replay release. be news And available call I the hours approximately

Kevin Longe

joining afternoon for Good today’s thank call. and you us for

quarter the second strong results exceeded market employees. by improved pricing of healthy by high end our financial our execution and driven demand, Our guidance, end

second quarter from quarter up XXXX. million, second up versus were first quarter Our consolidated and record the XXX% of the sales $XXX.X XX%

controlling Arcadia, up second Excluding acquired revenues quarter fourth year. up second last sequentially interest which in XX% year’s a and quarter from last XX% XX% during were we quarter, sales versus the

was DS The gross its the implement an in expect manufacturing DynaEnergetics, from higher additional margin oil lower the operating increases benefiting the finish new XX% systems first the sales second quarter at products manufacturing by costs quarter it’s prices. and on demand increased safe in number and gross second $XX.X will fixed business improvement the XX% onshore and overhead, North XX%. of strong a continue and systems DynaEnergetics from to up at The higher XX% products XX%, only and quarter the year shipped efficiencies America’s of fully enhance it industry. energy as selling year. during target record we last and family sales perforating perforating reflects our was integrated plans approximately DynaEnergetics in increase average to quarter DynaEnergetics improved resulting margin price DynaEnergetics performance in driven third from DS the Gap] launch will several international very to of to quarter Second features initiating million. gas technology. increase and orders position DynaEnergetics expand of from sequentially and plans the its that [Audio intrinsically its quarter

sales of A quarter as quarter. XX% margin, depress and in prices this guidance. inventories aluminum higher third Arcadia Arcadia’s million. is significantly XX% XX% which to temporarily first higher the in our products building were prices, purchased inventory The selling portion to quarter. prices. the Arcadia, his Arcadia’s of addressed increase reflects gross shift lead the during during at should to to prices increase margin, increased in architectural Michael gross aluminum the first which improved Second expected sharply at This business sequentially The quarter offset majority $XX.X implemented higher from selling to increase

large into saw and who which the residential provides the high Western service. healthy primary wood industry across building a real Southwestern to excellent steel, located doors During premium customer demand the backlog well its and and low- end Arcadia’s product relatively providing continued availability, interest facilities capacity that estate from to address a broader hundreds commercial established full Satellite this and of broad and of short at facility in benefited compared a consistent its lead windows with Custom of are work glazing small quarter, less source market. is Arcadia glass activity for aluminum rates centers manufacturing markets, service by XX second contractors, real times reputation Custom mid-rise housing market Arcadia generally at a the turn also and distance has industry to XXXX. its orders. quick United regional steady serves is and within affected These order a the rising that segment Arcadia keep the estate to expected States.

We finishing continue are headway of resource on Arcadia’s capacity. the new system progress planning to the enterprise make and and additional planning on making of design implementation also

the versus quarter our metals Second were NobelClad, sales business at composite first flat quarter.

hydrogen, are million, at increased to of with last metal to million which pressures and second also at long-term approximately to DetaPipe. $XX X% energy temperatures of for geothermal natural growing improved quarter. XX-month demand improve, NobelClad of pleased This prospects of the NobelClad year’s transition reflecting is commercial solar. NobelClad second global strong processing. sales profitability prices. sequentially from address very higher addressing segments gas use first received has quarter. joints, to LNG generated up $XX.X used product million, growth the including However, backlog the for alternative growth extreme liquefied to am and our and the order its the NobelClad line new NobelClad’s impact inherent $XX the end order week, from I mid- at several were industry, continued Rolling inquiries cryogenic bookings The during

continuing second call With the margins, As flow the free year, review on improvement Mike continual a we third turn our into of look our I strengthen improving financial second and results over that, in of to the are balance for will we head to quarter guidance. at and cash a half focused Mike? sheet. quarter

Mike Kuta

Kevin. Thanks,

million. $XXX.X quarter second noted, Kevin As were sales

sales were the sales Excluding reported quarter million, XX% same DynaEnergetics second second sequentially the and the Arcadia up American and XX% sequentially. consolidated $XX.X XX% versus of XX% sequentially up XXXX. year. reported of $XX.X sequentially. quarter million, sales sales second quarter versus of XX% quarter Arcadia increased $XX.X of North sales international XX% increase million, last an acquisition increased

international and X% flat last in versus first increased and quarter. Asia in quarter. a second margin quarter second quarter Excluding year’s XX% year’s the up from in South the XX% sequentially. Consolidated XX%, were million, NobelClad XX% in customer at sales second a down large sequentially gross was Sales last order $XX.X from

NobelClad from ago improved respectively. to quarter improvement of due XX% quarter, as gross second quarter the which offset were relates to gross quarter more flat increase in margin pricing favorable second quarter acquisition last sales expiration gross Arcadia Act, versus impact gross second quarter the improvements margin selling Second profit the year by actions. primarily of average the as higher The margin legacy employee impact units, and benefited as XX% margin selling quarter the quarter second These credits, volume XX% by DMCs higher reported overhead margin to the mix prices. first higher the project XX% business prices the DynaEnergetics the of and expenses, from to of in the on of XXXX. CARES XX% fixed year percentage year under than primarily XX% which combined XX%, of CARES was manufacturing Arcadia, well overhead the sales well average year at had gross DynaEnergetics. first as quarter. with reported quarter in Act the credit a from last second compared manufacturing and expenses, volume higher higher retention fixed versus prior first driven impact on of in the of benefited an second

We $XX.X and same retention SGXA was quarter $XX.X the variable Arcadia, attributable included Looking of $XX from the year-over-year million compensation, incentive resource expenses, at credits consolidated of reported of consolidated enterprise new compared also our and the last year. SG&A employee at second was The income expiration to NobelClad. $X.X million to million in implementation system the operating quarter associated with higher costs million. planning increase

$XX.X quarter. net million of reported capital, driven in by second million per payments quarter. million, million last or attributable ended in adjusted principal versus reported of working income The per adjusted DynaEnergetics of second decrease cash XXXX. $X.X was to $X.X million DMC $X.X diluted quarter XX, Second $XX.X $X.XX the EBITDA quarter reported adjusted million December NobelClad versus to to with building attributable DMC a was $XX.X EBITDA million. cash We of DMC on from higher DynaEnergetics was year $X.X long-term adjusted to year’s joint $X.XX Arcadia $X.X primarily partner. and increase second capital versus while and quarter million, diluted last our of levels EBITDA prices of $XX.X cash Adjusted second working debt EBITDA The Arcadia Arcadia share lead reflects income quarter distributions share attributable million quarterly higher input times. or at venture at net and increased required second adjusted inventory

Our is total outstanding share million. XX.X now count

up business The the the inventory. and report is Consolidated it a XXXX $XXX.X third XX% million in that sales Arcadia large a in Looking in is margins drove quarter. majority of $XX first project resulting $XXX at the million a million of quarter, in are the is which offset at quarter the in versus cost in million XX% will during million sales of the The the aluminum to range versus second At million in the $XX sales second XXXX DynaEnergetics lower in order. million third quarter. be of the be range versus of million the to lower $XX.X of the to included shipped quarter. $XX of margin expected report million previously international expected Arcadia’s Arcadia expected quarter versus quarter. NobelClad range North the $XX.X less the expected expected quarter. partially to is America mentioned million second NobelClad reflects reported pricing in reported $XX this to million to the a $XXX sales $XX $XX.X average spike to the be are range inventory guidance, in to decline in reported a second reported expected Improved million versus sales makes a to favorable expected range quarter. by $XX gross versus XX% international prices second in second from level,

is million general versus quarter. $XX to selling, $XX second Third million million reported the in $XX.X quarter expense the expected range XXXX in of administrative and the

to remaining quarter, SG&A expected in $X.X amortized acquired expense quarter associated will is approximately backlog new Arcadia. million. be was Arcadia’s second million Amortization expense to is the largely The Third enterprise expense to implementation with system in assigned quarter. fourth value $XXX,XXX the planning at a approximately amortization during be resource $X.X expected include

to in be Third quarter to $X a interest $X.X depreciation is million of and million to million. range expected expense is $X.X expense expected be

EBITDA adjusted range million. Third of With be in million is $X that, expenditures Capital in quarter $XX.X expected Operator? the expected to the are in questions. quarter. attributable any $XX versus of we second $X to take million to are to the range XXXX to $XX million million DMC a ready

Operator

Cameron from live. Cameron, coming Instructions] is your line Lochridge. is [Operator question first Your for today

Cameron Lochridge

Hey. Good my afternoon, guys. Thanks questions. taking for

Kevin Longe

Good Cameron. afternoon,

Cameron Lochridge

kind Kevin, So continue do was half, that with systems. now to the that still high what just start strong and I here, not if given can that even do levels, XXXX us in so could a I reach have on XXXX business margins earnings expected to where and happen? about hoping systems of margin to the dollars think ultimate into so, difference was think that levels, EBITDA back the going far But scenario likely see to if from half. maybe the at you if return you to mix, progression you a in like? could when to level Dyna, margins selling Could first wondering level, of are not that now looks we in solely touched return the maybe power help segment just previously very components

Kevin Longe

we margin XX% as sweet probably, average margins for the to the hardware were value when more higher were it that’s First And selling of started the the selling range. doing in systems, more and energetics. began turned system correct, increased company. goes primarily the a margin, but We margins the a by dollar XX% out see, spot units, that we revenue that which significantly, the as with came gross components, lower down company of all, into we initiating -- component

We -- in in XX% that’s were QX We with progress that happened up over QX. the happened are happy America. year-to-date, North revenue

XXXX the Our of second unit are improvement. the year industry third to fourth adjusts more into unit around quarter pickup and that in half XX%, margin we being And in volume to price. expect less last quarter volume activity. We see difference the level current targeting was the the and would and up the to more we want of growth continue as

months. back to And XX similar we reasonably EBITDA so the XX months sometime next getting see levels, to healthy hopefully, over

Cameron Lochridge

Arcadia. earlier to the might growth sequential the strong the we margins, very it. gears Switching the Again quarter, second Kevin. it prices strong dip aluminum the Got like in Thank in see That’s next quarter, on current quarter helpful. some year, sounds here first you, given XQ, half of high year. just in

topline, quarter. throughout And the trends first about though, sequential -- the wondering comment here how maybe the third into driving we what’s can related order did that… we decline if XQ, the On the how note, quarter can you and maybe should in parts was that on second I on of think here a

Kevin Longe

Yeah. quite levels that our customers. provide frankly, relative the to the we we Arcadia and Breaking think, the backlog like are uncomfortably resilient and got Yeah. high a I trends order down, have and to an service high would fairly backlog, in that business

expect inventory have see quarter. will stock this, and is pleased revenues in are as primarily last at into we which so first some margin with in even we and this of to markets quarter you of quarter. compared compression seeing to levels, the that at the as come of the the but pricing was less and year. more by quarter-to-quarter, going to the topline. performance point. down shift And cost work unit we at begin more third from a fairly purchased was change we second volume the the in are down -- their aluminum their it And what softening impacting and where of end that’s the change of is end we But come resiliency And into and the so higher year the a It’s at -- it’s through of

Cameron Lochridge

Got it.

make sounds decline to on you volume decline unit just the so were? correctly. as like decline tracking is on a And sure not am quarter, I so It pricing it the in mostly a and third much

Kevin Longe

Correct.

Mike Kuta

month $X,XXX look that time. $X,XXX we that you It and quickly, average time real at to-date just first just and through And over so are LME far running was QX X/XX. Yeah. at just the at

Cameron Lochridge

it. helpful. Got it. will Thank and turn you. That’s I Got back. super you Thank it both

Kevin Longe

Cameron. Thanks, Yeah.

Operator

coming is question Stephen, next is Gengaro. from Your live. Stephen your line

Stephen Gengaro

afternoon, everybody. Good Thanks.

Kevin Longe

Yeah. Hi, Stephen.

Stephen Gengaro

Kevin. Hi,

your in given or don’t So heard talked EBITDA sequential Arcadia. I talk impacting quarter the decline? I it maybe in And you costs of that? next -- the EBITDA bridge second were on you Can Can if the it’s and where about quarters gap like longer us sure you flush a also margin mind, It inventory, am you not raw compression mostly line? is at material you say, quarter help in the can second and you the somewhere about the good Arcadia the have margin between you compression third sounds but out? is on margins guide which term sort

Mike Kuta

Yeah.

got think So QX this QX question you is is And bridging to to your Mike. guide, on, answer when NobelClad They lumpy. have project about mix. unfavorable

EBITDA on couple that’s after QX. down X.X million a So in

downtick a in NobelClad margin slight really it’s mix of just Arcadia. probably So between XX-XX kind a and

the a think, indicator are average longer move with in seeing that taken on margins bit. aluminum that was forma see we medium you a as a have basis, around a before prices, been we to long-term that’s Their I and from standpoint, quite term and an XXXX even XX%. pro XX% historical then. of was rise But margins QX good Arcadia’s

with bit but long-term. aluminum to out where So a going see that’s to it’s settle around price I bounce going little think are it you volatility,

Stephen Gengaro

just I am comments? at is where in remind specifically make Okay. out sure, am were Canada trying Q, there’s want mentioned Thank because sure not to Canada Can U.S. you you. is us I And you U.S. figure know can speaking -- included? the international, I versus you Are to international in you the, Dyna. those -- changes or

Kevin Longe

Yeah. is not our in I say. the It’s North Canada America. would of I guess, part international,

Stephen Gengaro

higher secure the demand. these are working side had real or if would to kind And faring just Great. hard would Okay. similar next we are pretty products, I of am pumping been jobs And was, bring of are to EMPs acceleration to your the sense cases. Thanks. integrated in trying even products greater get maybe have shift to products a equipment I seeing, or that efficiency to you other then the and then versus perf products systems lot hearing some that is question are compete? trying or like And a was on equipment the for, how be seem pressure acceleration your these sold and consistently we some that out year of -- in of and packaged which it in other same and

Kevin Longe

but pickup X systems. specifically XX%, XX% saw approximately volume, we in QX quite year-to-date QX in our the the time, in a actually same We in And unit DS pricing numbers, the points. approaching saw percentage our by a in Yeah. to pickup at

our right strong are all with of pumping growth system pleased and and in second about our good feel a where half source sold at was healthy margin number the in service first in we our responsibility, at these companies to growth the with the to are year. both in so you compared But market we working share So pressure more people capital, benefit dynamics out half now. less pretty year we where where we the towards some a fewer price. ago, that markets we sit work we the have situation well single progression and site, price an of in and volume that it integrated going of the this the we year, expect seeing and are see In

Stephen Gengaro

Is quarter. that Thanks. in one, in a international quick accretive is just other one the sale margins? the to And Dyna Great. large

Mike Kuta

Yeah.

Kevin Longe

Yes.

Stephen Gengaro

Okay.

Kevin Longe

Yes.

Stephen Gengaro

you Thank the Appreciate you. color. Thank all. both. That’s

Kevin Longe

Yeah.

Operator

live. Sweeney. line for is today Gerry is from Gerry, your Your next question coming

Gerry Sweeney

Good afternoon, Mike. Kevin,

Kevin Longe

Hi, Gerry.

Gerry Sweeney

How you doing?

Kevin Longe

Good.

Gerry Sweeney

the is but order. Q like three had DynaEnergetics, on point large of of and international Just clarity said, in sort sequentially looks XQ, you guidance as you it a the flat,

how kind one-time sequentially. seeing that in that are actually so business, you -- was that XQ gave that a right… of There’s big So of happens that but order? out, to You American sort a was a XQ, even year, growth five a bracketed base is once North

Kevin Longe

Correct.

Mike Kuta

Yeah.

Kevin Longe

was Correct. $X It order. million a approximately

Gerry Sweeney

Okay.

Kevin Longe

And be third anticipating in quarter. volume replaced that are internationally that to we order not the

in are And unit so and where is America price. revenues -- in volume pickup that both you the North

Gerry Sweeney

costs some unique with say, let’s purchased you of that’s potential aluminum case. pricing with, or help of Got I Is that? it. Arcadia, in they the this some that way had or strategies just of pricing But was on, very was sort And not implementing think, pricing that thing it volatility the seems cost some one then the just you when I of goods it, talk struggling currently. of mitigated sold, necessarily i.e., like happening the it’s can of inflationary because of understand in me aluminum extreme -- sort

Kevin Longe

Yeah.

they it’s have with an very that have in very, prices proper think actually at increases they are the it. are selling metals. job inflation I along of mechanisms a for done got the in and focus excellent primary passing and price they efficient place particularly terms in managing And seeing,

that cost get aluminum. chain very hold it’s challenges. that, volatility to supply been the been great a materials that in we the the of the Now, there’s And in situation of sense difficult also odd it’s some of is, with have there’s --

for year inventory, half it of the bought earlier, at high uncomfortably the into to was we inventory we the at us aluminum prices the But… and cost at the we inventory have and quarter revenues prices. second that see are just that is -- the we that third building the an are for was going we are in but of mentioned for really cost more And as our backlog, I requirements. it And so various important have time alu going to it’s pay with to But aluminum. going customer meeting our the higher absorbing

Gerry Sweeney

So…

Kevin Longe

none, fair pricing, an pass far have inventory, been to to as companies to their pricing as our in quite ability along I prices and are at … associated manage with. customers, manage second they frankly, organization

Gerry Sweeney

it. Got

the this profitability if was the end discussion, service customer the more business of day, a a decision as at not relates of and it’s… to So

Kevin Longe

thinking trying it’s the managing demand. which an aluminum Correct. that’s What is and inventory and manage we long-term, are job have imperfect to It can with selling our and service or the managing sure map do done and selling -- they prices, to that And for all our difficult levels price prices, a been the is to across LME are meet our we to manage. late good medium- managing world making of levels we customers.

Gerry Sweeney

pricing to I And the is made this sort volume, second half some line then say don’t targeting comment you -- Got less the we -- is a that’s we in with increases maybe but this sand, saying, more drawing you are want DynaEnergetics, it. of to more, but are equipment? going take sell on going the term, common price are in the to not right the you hey, are and --

Kevin Longe

I with think for it’s deal really I we that’s think our maybe how -- handed heavy too our that no, customers.

look at with are that customers you And value price even really are Our increases when product of our perforating of equipment, implementing… our cost the the the line. we seeing

Gerry Sweeney

Yeah.

Kevin Longe

we overall through -- cost cost a our of are value offering improved the efficiencies the well outweighs And that our of that though we and of is is perforating and well increases. are completing of drilling our of the equipment getting for premium, …that price quite we declining, we and for actually declining the fair the customers so increases. frankly, even because equipment cost or getting far the create are price that

Gerry Sweeney

it. Got

they are an looking your am price increases you it pricing as just where year, seen to as this along on it going more basis. is and you they I inflation are price we have implement just year, price I implementing move? along -- just or then is that start on use and then then what, the and increase twice is how do at they how then so just said a once So Board question curious they to start a as strategy come came across we that and -- companies to one raise the pricing,

Kevin Longe

have much have you and be but the see and mean these markets of how your supply in you where late dynamic chain, Yeah. inflation you how you than increases. terms I implement are you of to price both increases cost more see been flexible, they manage significant

get are best ratcheting we We that customers framework but have best prices, we are up our -- a framework. where our

We changing of all are is that a And it operating not them so the loyal to brings have relationships the to product, of framework. and within we that characteristics to committed base the operations competitive product customer people because have and the and we all their things. and are just that a successful balancing responsibility keeping we these of also marketplace, the in

Gerry Sweeney

it. Got

I line. will in Okay. back jump

Kevin Longe

Yeah.

Gerry Sweeney

you. Thank

Operator

a is your [Operator from Stephen, follow-up coming question We Instructions] Stephen Gengaro. live. have line

Stephen Gengaro

Thanks the gentlemen. follow-up for taking

Kevin, that about Dyna, talk normalized of They would the and healthy. kind going and So, a margin we to NobelClad of couple pretty back years, a of be used sort incremental just margin. incremental were

incremental How do the earlier XX% we range. I to three the somewhere think about here? go as potential in you in from about you XX% think margin segments forward talked the

Mike Kuta

were range, Yeah. to in back a Stephen, pre-pandemic, to well a we range, are range in that’s margin a and think, pricing. high they right would in that, but variable DynaEnergetics business then XX%, now that’s Arcadia, run the And it’s that on with I closer get to that I XX% them XX% from mid-XXs year, have remain XX% we we NobelClad, think to range. XX% ability cost long-term gross rate XX% lumpiness we that growth that with with, on would think right on that quarter-to-quarter, margins. with the as about business they see the the that to a And in again, as but margins over incremental how in historically usually grows. say

their well. incremental margins XX% should be that range as XX% to So in

So we still same of see in XX% along zip XX% that range. that to sort code

Kevin Longe

it. that’s Stephen

Stephen Gengaro

capital it wouldn’t I and the the of the I I front is so bit. GDP from noise. add resilient. you know would only you side the that one Arcadia other signs the Are more businesses be But on solid? that next we couple pieces more concerned think into worry little things any we in hear should of background as about the perspective, is Yeah, quick look there or those quarters had muted mentioned a any do you I custom see probably are pretty other you

Kevin Longe

Hey.

that I end their of and and solid is balancing terms they market replacement versus outlook pretty construction, the too resilient great a evolves. pretty the they repair bit between commercial in or are as has replacement think those commercial -- their little they a -- their new of self-balance job -- do

And the that we -- a we they and foreseeable market unit we is standpoint backlogs the the served that of are so volume a -- are combination that from feel future. are comfortable they fairly with where for

Mike Kuta

that the the that’s think in the end rates. I we say less higher side, serving residential interest of market and susceptible higher to

in and the residential positioned commercial, well are both yeah. we think we the So

Stephen Gengaro

for you answers. the Thank Okay. Great.

Operator

Sweeney. follow-up is live. Gerry You have coming question your Gerry, from another line

Gerry Sweeney

come the they do. what are as into know to at But it your customers come you looking visibility I they so little half have they with a the ask so can make are figured not on Hi. that questions, a their But We orderings I bit down one other in much them Do call a little XXXX, more much any but side, have you of depth. of harder for you? probably DynaEnergetics to level importantly, talking how plans? even to short into this the with more do and Two second and follow-up. in insight year,

Kevin Longe

respond marketplace demand. vertical a respond we that one integrated times to quickly to business lead can quickly actually and bring their that’s it’s we to is our system with turn integration and have that’s of -- short We fully we that quick the the with assembled, our values

we days, so weeks. three less and usually visibility have than it’s And around that’s XX

Gerry Sweeney

Got it.

Kevin Longe

Yeah.

Gerry Sweeney

Yeah.

Kevin Longe

how to overall and year, comes a specific more the market it are than customer. next stages at frac is rather When we looking

Gerry Sweeney

and Got it, the when out tighter, in prepared? queue sort sure, our make sure are I get things reaching are especially wasn’t they be start we of saying plans, these and

Kevin Longe

has done team vertical we terms particularly an the initiating of With easier its and volume on integrated -- managing supply Yeah. that growth switch integration, excellent it’s admittedly with how our job in have chain systems. and

And the meet have able our of so been they customers. demand to

Gerry Sweeney

Then side starting there always costs any that it. on and going it’s in be they of the the that’s little But it’s be talking about is SG&A of up background been permanent, legal, quarter but? in are can there highlight a there are it’s not just sort the perk -- to it to to or that, for not Got going bit. because we sort of we and stopped the sort that

Kevin Longe

Yeah.

spending I costs, around we for are think rate quarter less to systems. in compared year-to-date, because that this we million million first the $X.X a comfortable and were the primarily see court how think, of and second now the are way working half the -- court year, systems right that’s half through the probably of $X things litigation of and are I their year us actually they the in Our

Gerry Sweeney

not litigation, Got should going always that on say. going that that’s some $X always but to it. million -- are And million… But I you that legal have $X litigation, the to is you -- really mean, have, litigation, I is are costs,

Kevin Longe

Yeah.

Gerry Sweeney

litigation? really …

Kevin Longe

litigation, purely correct. That’s

Gerry Sweeney

Yeah.

Kevin Longe

year-to-date? correct Mike, the I those on million And did get $X numbers

Mike Kuta

Yes.

Kevin Longe

Okay.

Gerry Sweeney

Okay. I appreciate it.

Operator

coming follow-up Your a your live. next line from is question question Cameron. Cameron, is

Cameron Lochridge

Hey. you. Thank

so. Just we all follow-ups now doing are

Kevin Longe

want don’t away, go enthusiast. we We so you to are

Cameron Lochridge

throughout quarter it. it’s think how to the I appreciate year the on items second cost circle this back some of here, how I progress and in Well, and XXXX. about wanted to

XXXX does the less to accounts quarter. in on third call had think it into a $X.X little million at insight Arcadia should G&A $X.XX go for Arcadia What in XQ than, about you offer and we second jump that? some the -- that quarter? it for How back what about what you can First, million,

Mike Kuta

Yeah.

second quarter going I people quarter have are it in. been a and systems, people, some second a tick putting I think processes, on go-forward we think and bit. rate basis might up prevail see the It’s you even that run to

Cameron Lochridge

ballpark for with us heard given loud you see magnitude the I Arcadia’s the pieces, Okay. for prices And just Got the down you the moving and slightly a can give then, margins all it. have the you, quarter year. third But Arcadia? if should of mean, coming about in early in we aluminum maybe clear decline we

Mike Kuta

Yeah.

couple think I of So points. a it’s

Cameron Lochridge

Okay.

Okay. Got it

Mike Kuta

little XXX margins be mitigate it. To it, for clear could able like it might XXX marching points to something back XXX a points, see XXX XXX we basis the -- quarter. more than It so basis But that. be then But call be be basis could points up. that. bit to basis points, We

Cameron Lochridge

Got That’s it. Got helpful. it.

I don’t back And Dyna, call mean, right, $X-ish and maybe items, like quarterly Okay. million. it, the to distribution if G&A, expenses your I on know, just I and selling then were, think XXXX, cost

kind the in new was as million, of the it business grows? of quarter, that given about $X.X that the scale Here just second is norm economies

Mike Kuta

XXXX, I are mean, and and around was I Yeah. for say at well. so. I in tracking we back look that when number would DynaEnergetics’s as million $XX.X SG&A XXXX

it We going growing legal have we continue elevated topline, had number. the and have the spend SG&A we to think is into existing

Cameron Lochridge

it. Got Yeah. Yeah.

Kevin Longe

timeframe. and location as exited particularly also business that our we more Russian over efficient We became think I in time,

Cameron Lochridge

Right. right. That’s

Okay.

Okay. guys. for you. All it me right. Thank That’s

Kevin Longe

Yeah. Thank you, Cameron.

Operator

question for your is next today is line live. Jim coming from Brilliant. Jim, Your

Jim Brilliant

are Hey, doing? you guys. How

Kevin Longe

your hear voice. to Nice Jim. Fine

Jim Brilliant

fourth that I I hear you in to said hear at back want questions, the I you. right? year, one you of but on mostly are exit gross Couple quarter DynaEnergetics, looking about to the thought XX% just to Good clarify the margin year half of thing, did

Kevin Longe

Correct.

the that we customers. we that the to but quarter, quarter the third see won’t notice the given our in exit and hope You really pricing that’s layering in and the fourth have of

Jim Brilliant

or recent increase April? there one is you about price And are Okay. a from talking

Kevin Longe

delayed they taking they will quarter progress to price of because it will goes have. as being angst effect -- away It’s so in but we recently quarter or and the we -- create got lot it No. fair from seems But quarter. the that we out. third They this we either a published are the the announced and are increases, entire people are more confusion now talking across start individually within are customers to group and recent and

Jim Brilliant

sense. at manufacturing just what the enhancements. That several have makes to the DynaEnergetics And on have of then changes revenue you over since my lot a Okay. since -- I of made head is years made capacity the XXXX the guess, reset internal you with kind last this,

revenue capacity these say is you would what So days? your

Kevin Longe

Yeah.

share easily I could We are feel terms in the that operate operating in of and XXs am with market volume. our the capacity that And up in have. terms to low-to-mid we we of mid-XXs talking the unit we

Jim Brilliant

Okay.

what’s at we -- utilization maybe can your so So this point?

Kevin Longe

It’s -- I’d have calculate it. to

are pushing it not We right now terms in of…

Jim Brilliant

You of sort so? could that and add shifts additional thing

Kevin Longe

Yeah. Yeah.

potentially current with are In the are XX% in XX% the that shifts operate. fact, operating probably operating or we we could utilization --

Jim Brilliant

certainly for Okay. of guess, industry backing integrated the And out reports, some widespread there’s I guys… shortages pretty with for, of circuits not overall you been kind then

Kevin Longe

Yeah.

Jim Brilliant

your but out? you that How in do see industry. results, with …. the playing

Kevin Longe

and Yeah. because And that make. not in circuits I We electronics we for our have have supply own don’t had fact, chain. we see of mean boards group we benefited shortages, sourcing any we our for the probably our it.

-- shortages are we that aware our just any so but have other from only of we And on hand, companies, heard second haven’t own of we had our own.

Jim Brilliant

out any new coming the And Dyna? comment Okay. upcoming of on then products

Kevin Longe

I have announcements not will, perforating this the features, change the the mean as make are into size competitive, at today. efficient, systems it features time. we are us Not more more They introduced if market. the going you are in will some to that of the They market. manufacturing we more overall on

the not that And customers standpoint expanding will a believe share It’s from over so help will -- we that our us time. standpoint from available probably it’s they help market. performance total a

Jim Brilliant

that, just was Okay. And first on you a right? think you I is there -- NobelClad, that order to your I for think then DetaPipe, said

Kevin Longe

Sure.

Jim Brilliant

know ignored… market you guys that, what for And which the end I is

Kevin Longe

It’s up…

Jim Brilliant

on so while, a congratulations that? …for

Kevin Longe

acrylics, the in of if you It’s the used is will. Yeah. by which you. industry petrochemical Thank epichlorohydrin, used production in

Jim Brilliant

Okay.

initial seeing it getting I -- are the be petrochem spending that have in to was is it maybe to cap more appears but the it’s work we pushed every so -- that And that seems now and know you going, industry it’s right, in order, now business? it kept time the years the talked for about finally the time.

Kevin Longe

Yeah.

Jim Brilliant

orders You see that thing? sort positive more of

Kevin Longe

the years. a the capacities. onshoring couple on also maintenance -- And years of the growth some are are the -- facilities feel the we to are there’s been There the clock the production the some as so we than is well they into the in, that as working some at hard over applications. Definitely. has come experienced going around see of both of in of thing But supply have work maintenance better back in Yeah. the certain the of terms in couple with of particular, of next we what past last chain over and we hope that year, market issues

Jim Brilliant

NobelClad give XXXX it willing And Okay. there? you guidance is on go us to or get early outlook in too out limb and are of any a kind for some to

Kevin Longe

to go a not guidance meant I limb given am that. I haven’t No. in half. this on on willing have the that out we

Jim Brilliant

Yeah.

Kevin Longe

so. think, …I

Jim Brilliant

thought I try I it’s Kevin, been…

Kevin Longe

Yeah.

Jim Brilliant

… a time. long

Kevin Longe

Yeah.

show think I on are NobelClad’s we me growth. story

Jim Brilliant

Yeah. Fair enough.

Okay. coming with kind And down, any get Arcadia, working you on the aluminum then capital of because prices do that? of benefit

Mike Kuta

Yes.

Kevin Longe

also do availability the aluminum. greater of may indicate in that inventory, of of terms value both pricing We the but

as don’t we to So as much have to we have we today. -- inventory have carry

Jim Brilliant

Okay.

of be easy a then, the course, it raw a finding just is lower? are to it’s of going -- it’s lot -- easier So and now cost you lot

Kevin Longe

Yeah. I mean.

Jim Brilliant

Okay.

Kevin Longe

pleased and our in both guess, of I end DynaEnergetics. we increase working the are with the Arcadia where say, that, And the I in we ratio significant at given that have should particularly is quarter, leverage capital

coming of both should that turns and we up hopefully, capital. down, And in see so a businesses, in an with increase freeing

Jim Brilliant

will okay. I it appreciate. Okay. me. That for Thanks. Great, do

Operator

remarks. to questions floor in no would over to I turn closing any Kevin There be further like queue. appear to the for

Kevin Longe

for quarter. you. our we to a company great talking have just and forward at forward day with end I’d in everybody speaking their the third you again thank And and to like look interest to look with of the

Operator

This you, ladies and conference call. conclude does Thank gentlemen. today’s

may phone lines and participation. a your You time day. wonderful have disconnect for Thank you your this at

DMC Global (BOOM) 7 Aug 222022 Q2 Earnings call transcript