BOOM

Arcadia Performance & Restructuring Initiatives

• Improved sales and profitability were achieved despite sustained weakness in the commercial construction market, where the AIA Architectural Billings Index has recorded 41 consecutive months of contraction, the longest downturn in the index's 30+ year history.
• Turnover improved for core short-cycle products across Arcadia's regional service center network, as well as high-end residential windows and doors, driven by successful efforts to improve product availability, service, right-size the residential product offering, and refocus on attainable performance targets.
• Stable, consistent leadership was restored after a period of turnover, and former employees in key sales and branch roles have returned to the business, supporting customer and supply chain relationship rebuilding.

Dyna Energetics Strategic Update

• Demand was steady year-over-year, but profitability was pressured by unfavorable product mix, higher input costs, and ongoing industry pricing pressure.
• Dyna Energetics completed its first shipment of a new perforating system custom-developed for enhanced geothermal systems (EGS), an emerging potential source of baseload power that management views as a meaningful long-term growth opportunity.

Nobleclad Operational Update

• The year-over-year sales decline was primarily driven by lower activity in the global oil and gas market.
• Nobleclad holds a healthy backlog, including customer-delayed orders; increased shipments from this backlog are expected to drive stronger results in the second half of 2025.

Capital & Ownership Update

• DMC ended Q2 with $28.6 million in cash and cash equivalents; net debt increased to $30.5 million from $18.7 million at 2025 year-end, driven by higher credit facility borrowings to fund working capital for improving activity.
• DMC's joint venture partner's 40% put option for Arcadia becomes exercisable on September 6, 2025. If exercised, DMC can settle via 100% cash or 20% cash / 80% convertible preferred shares, with conversion capped at 19.9% of outstanding common shares requiring shareholder approval for any additional dilution. Preferred share redemptions are only permitted if the board determines DMC has sufficient legally available funds to avoid impairing solvency or creditor interests, with no default if redemptions are delayed.

• Third quarter 2025 guidance calls for consolidated sales in the range of $158 to $168 million, with adjusted EBITDA attributable to DMC expected between $10 and $13 million.
• Sequential improvement is anticipated from steady performance at Arcadia, rising well completion activity at Dyna Energetics across core oil and gas and emerging EGS markets, and increased product shipments from Nobleclad's backlog.
• Management explicitly stated that guidance does not account for potential increased supply chain disruptions from renewed Middle East hostilities, continued volatility in aluminum input costs for Arcadia, or broader weakening of end market conditions.
• Guidance remains subject to upward or downward revision based on evolving macroeconomic conditions and changing tariff policies, which heavily impact DMC's energy and construction end markets.

Consolidated Q2 2025 sales were $157 million, with adjusted EBITDA attributable to DMC of $10.7 million, which exceeded the high end of management's forecast range. 1. Arcadia: Second quarter sales increased 9% year-over-year and 19% sequentially, marking its strongest quarterly sales performance since Q2 2024 and best EBITDA performance in over a year. Adjusted EBITDA margin (before NCI allocation) was 13.6%, up from 10.9% year-over-year and 6.9% in Q1 2025, representing 40.1% of consolidated Q2 sales. 2. Dyna Energetics: Q2 sales were flat year-over-year but increased 13% sequentially. Adjusted EBITDA margin was 8.4%, down from 13.4% year-over-year but up from 4.6% in Q1 2025, including a $1.5 million benefit from tariff refunds. Dyna Energetics represents approximately 29% of consolidated Q2 sales. 3. Nobleclad: Second quarter sales were down 17% year-over-year but increased 15% sequentially driven by higher deliveries on a large petrochemical order. Adjusted EBITDA margin was 13.7%, down from 16.5% year-over-year but up from 9.8% in Q1 2025. Nobleclad maintains a healthy backlog, representing approximately 30.9% of consolidated Q2 sales. Overall Q2 SG&A expense was $24.5 million (15.6% of sales), down from 16.8% of sales year-over-year and 18.1% of sales in Q1.

• Persistent macroeconomic headwinds across all end markets: ongoing 41-month contraction in commercial construction billings, sustained interest rate pressure on long-cycle construction projects, and uneven activity in global oil and gas markets.
• Ongoing pricing pressure and competitive fragmentation in Dyna Energetics' core perforating gun market, with limited ability to pass through higher input and tariff costs, resulting in continued margin compression.
• Volatility in aluminum input costs for Arcadia, and aggressive pricing from financially distressed competitors that creates pressure to accept low-margin business to retain market share.
• Geopolitical risk: potential disruptions to European and Middle Eastern supply chains from renewed Middle East hostilities, which could impact Dyna Energetics and Nobleclad shipment timelines.
• Uncertainty over the outcome of the upcoming September 6 exercisable put option for Arcadia's remaining 40% non-controlling interest, with no visibility on whether the joint venture partner will exercise the option. Uncertainty around future tariff refunds, which are not included in Q3 guidance and cannot be reliably forecast.

Q: How much of Arcadia's lost market share from 2024 supply chain disruptions has been recaptured, and is there more upside remaining? / A: Management estimates roughly half of the lost controllable market share has been recovered, driven by restored supply chain stability, consistent leadership, and renewed focus on core short-cycle storefront business. The remaining market share that has not been recaptured is largely tied to unsustainably aggressive pricing from financially weaker competitors, which DMC does not want to participate in; management expects this share to return if market pricing normalizes. The overall commercial construction market remains very weak, with long-cycle projects still depressed by high interest rates, but the core short-cycle business that is Arcadia's foundation has consistently grown for five to six months as customer trust is restored.\n\nQ: Is the EGS opportunity differentiated from Dyna Energetics' core oil and gas business, and what is the competitive pricing landscape for perforating guns? / A: EGS uses similar perforating technology to traditional oil and gas, with minor modifications to gun size and detonators to accommodate different geothermal rock formations, so DMC's existing technical leadership in oil and gas directly translates to a differentiated position in EGS. Pricing for perforating guns remains very competitive, with no room for price increases, and continued margin pressure from unrecovered tariffs and rising input costs that impacts DMC and its competitors alike.\n\nQ: Why did management provide updated detail on the Arcadia put/call option now, ahead of the September 6 exercise date? Is this foreshadowing an imminent transaction? / A: Management provided the update to clarify the existing terms of the agreement (which were fully disclosed in 2021) to clear up market misconceptions, as the option becomes exercisable for the first time in September, and there is no visibility on whether the partner will exercise the put. The key clarifications were that dilution is capped at 19.9% of outstanding shares without shareholder approval (putting full control of excess dilution in shareholders' hands), and that mandatory preferred share redemptions are only permitted if the board confirms DMC has sufficient funds to avoid threatening solvency, meaning no excessive debt load will be taken on to complete the transaction.\n\nQ: How much of Arcadia's year-over-year sales growth came from higher aluminum pricing versus higher volume, and how much more operational optimization is possible? / A: Most of Arcadia's year-over-year sales growth comes from higher aluminum pass-through pricing, with additional volume growth coming from the core short-cycle storefront business, which serves smaller less price-sensitive customers and is higher margin. Most of the operational heavy lifting has been completed by restoring stable leadership, rebuilding customer and supply chain trust, and right-sizing the residential business, which is now meeting all performance targets. Management will avoid forcing additional operational changes in the current weak macro environment, and will hold off on more ambitious improvements until market conditions improve.