DMC Global Inc.

Good day, ladies and gentlemen, and welcome to the DMC Global Second Quarter 2020 Earnings Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Mr. Geoff High, VP of Investor Relations. Sir, the floor is yours.

Hello, and welcome to DMC's Second Quarter Conference Call. Presenting today are President and CEO Kevin Long and CFO Mike Kuda. I'd like to remind everyone that matters discussed during this call may include forward-looking statements that are based on our estimates, projections, and assumptions as of today's date and are subject to risks and uncertainties that are disclosed in our filings with the SEC. Our business is subject to certain risks that could cause actual results to differ materially from those anticipated in our forward-looking statements. DMC assumes no obligation to update forward-looking statements that become untrue because of subsequent events. A webcast replay of today's call will be available at dmcglobal.com after the call. In addition, a telephone replay will be available approximately two hours after the call. Details for listening to the replay are available in today's news release. And with that, I'll now turn the call over to Kevin Long. Kevin?

Thank you, Geoff. The second quarter was marked by very challenging conditions in our primary energy markets. The COVID-19 pandemic led to a collapse in oil and gas demand, and a corresponding slowdown in well completion activity. In the United States, completions dropped by 70% versus last year's second quarter. This created a difficult environment for DynEnergetics, our oil field products business, which saw many customers stop well completion activity altogether. Other companies used the slowdown to work through backlogs of undifferentiated perforating component inventory. The slowdown has been challenging. However, it is enabling DynEnergetics to work more closely with several of the industry's leading operators and service companies, many of which are transitioning from field-assembled components to our factory-assembled, performance-assured perforating systems. Customers that have completed this transition are achieving significant improvements in operating efficiency, while also reducing their investments in assembly personnel and related infrastructure. They also benefit from just-in-time delivery of the industry's most reliable and best performing perforating systems while significantly reducing their investments in working capital. We continue to focus on DMC's long-term business strategy as exemplified by our sustained investments in innovation, technology, and product development. These investments enable DynEnergetics to make several new additions to its product portfolio. These include a new generation of the IS-2 intrinsically safe initiating system, which now enables deployment of up to 100 perforating systems in a single run. DS-Echo, which is the first factory assembled perforating system for the emerging refract market. And finally, the patent pending DS-Microset and DS-Liberator, two products that expand our well completion product offering and increase Dyna Energetics addressable market by more than 20%. DS Microset is used to set the plug that isolates an individual stage in a well, while DS Liberator is a ballistic release tool that enables the service company to disengage from the perforating string. Fract designs are growing in complexity and Dyna Energetics expanding portfolio of perforating systems and Well Completions Tools is enabling completion engineers to tailor their well designs for their surrounding rock formations and reservoirs. Nobiflad, our composite metals business, delivered second quarter results that met our expectations and included a modest increase in order backlog. The business continues to expand the applications for its composite metals and is pursuing a wider range of order opportunities in both the downstream petrochemical sector and new end markets. While Novaclad is experiencing certain COVID-related project delays, quoting activity remains healthy and its long-term prospects are stronger than ever. We discussed in our last call that we have reduced our activity-based costs at our manufacturing sites to match much lower demand levels. Over the past six years, we significantly reduced our manufacturing footprint and modernized our facilities, which enabled us to act quickly to reduce costs and limited the magnitude of restructuring charges this year. We have a highly efficient business model with the capability and capital in place to deliver on our long-term strategy. We don't anticipate further cost reductions or meaningful restructuring charges. Our enhanced financial strength is reflected in our balance sheet as well as the improvement in our net cash position, which increased to $4.5 million at the end of the second quarter from $2.9 million at the end of the first quarter. DMC has a highly efficient asset-light business model and differentiated proven strategies for both DynEnergetics and Nobleclad. We are cautiously optimistic the second quarter will represent the low point of the downturn for DynEnergetics. However, it will take several months for the industry to work through a series of fundamental challenges, including COVID-related demand weakness, strained balance sheets, and an additional inventory overhang. We expect to see consolidation and attrition in the industry. which will result in a healthier market made up of fewer, stronger companies. With our strong business fundamentals, we are confident DMC will be one of them. I'll now turn the call over to Mike for a review of our second quarter financial performance. Mike?