DMC Global Inc. Q1 FY2026 earnings call

• Macroeconomic challenges persisted in first quarter, with Middle East conflict intensifying headwinds. • Noted longer-term green shoots like improving end market demand indicators. • Arcadia affected by timing of large project and high aluminum costs. • Dyna Energetics impacted by lower product sales in North America and Middle East conflict. • Nobleclad affected by timing of large project shipments and reduced bookings, but had backlog increase. • SG&A expense $24.6 million, 18.1% of sales. • Cash and cash equivalents $32 million, total debt $54 million, net debt $22.4 million.

Consolidated sales were $135.6 million, down 15% from Q1 2025 and 6% sequentially. Adjusted EBITDA attributable to DMC was $3.9 million. Arcadia: Q1 sales $56.7 million, down 14% y-o-y, flat q-o-q. Adjusted EBITDA $2.3 million. Dyna Energetics: Sales $59.5 million, down 9% y-o-y, 14% q-o-q. Adjusted EBITDA $2.7 million. Nobleclad: Sales $19.3 million, down 31% y-o-y, up 9% q-o-q. Adjusted EBITDA $1.9 million. Backlog at end of Q1 increased 12% q-o-q to $70.3 million.

• Expect sales in range of $148 to $158 million for Q2. • Expect adjusted EBITDA attributable to DMC in range of $6 to $8 million for Q2. • Anticipated sequential improvement driven by demand growth across all three businesses. • Guidance assumes relatively consistent operating environment, subject to macroeconomic conditions and tariff policies.

• Macroeconomic pressures and Middle East conflict slowing activity in core markets. • High aluminum input costs and competitive pricing pressure affecting margins. • Tariff policies impacting financials, difficult to forecast. • Supply chain disruptions and raw material availability issues. • Uncertainty around global energy security and defense/energy infrastructure spending impact.

Q: Color on where largest sequential increases in second quarter sales guide may come from?

A: Noble Cloud business expecting significant ramp up for international petrochemical project.

Q: Talk about price-cost impacts and tariff side for Arcadia?

A: Margins challenged due to aluminum pricing post conflict, competitors facing same issue, applied for tariff reliefs but difficult to forecast.

Q: Sense of how quickly customers can move on orders for Dyna if CapEx spends comfortable?

A: Very short lead times, no major pickup expected next quarter but can turn things quickly if happens.

Q: Status of new product innovations and automation for Dyna?

A: Savings from automation already baked in, value engineering and product reengineering for cost, geothermal product expected with some business this year.

Q: Details on Naval Readiness Program under Nobleclad?

A: Multitude of increased shipping, more than one or two subs talked about, hampered by manpower, long term positive.