DMC Global Inc.

Good afternoon, ladies and gentlemen, and welcome to the DMC Global First Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Jeff High, VP of IR. Sir, the floor is yours.

Hello, and welcome to DMC's First 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, Jeff, and good afternoon, everyone. Our first quarter sales of $55.7 million came in at the low end of our forecasted range and were impacted by the push-out of $1.7 million in orders at Novoclad, our composite metals business, and by our winter storm in Texas that led to a nearly two-week halt in U.S. customer activity at DynEnergetics, our energy products business. Consolidated gross margin was 23% and also was within our forecasted range. Margins were impacted by lower absorption at DynEnergetics due to the shutdown of our Blum, Texas manufacturing center following the winter storm, and by higher spending on patent filings at DynEnergetics. During the quarter, we spent approximately $1 million on patent litigation, which relates to legal action taken against several companies we believe are violating DynEnergetics patents. We are confident in our position and have the determination to see these cases through to a successful resolution for DynEnergetics. DMC finished the first quarter with a strong balance sheet that included cash and marketable securities of approximately $67 million. We repaid in full the $11.8 million balance on our term loan, ended the quarter with zero long-term debt, and raised net proceeds of $25.3 million by selling shares in an at-the-market equity program. Our end markets continue to improve, and we are encouraged by our prospects for stronger financial results during the second quarter and back half of 2021. Novaclad entered the second quarter with an order backlog of $43 million, several large international order opportunities, and a new product offering expected to be commercialized later this year. At Dine Energetics, well completion activity recovered rapidly following the February winter storm. Fract spreads, which are a key barometer of completion activity, are seeing increased demand. After declining to fewer than 50 spreads in May of last year, the industry was approaching 200 frac crews operating in unconventional U.S. basins by the end of the first quarter. The number of active spreads has continued to increase in April. Dyne Energetics implemented a 5% price increase on all products, effective March 30th, and we are beginning to see the impact of the increase in average selling prices month to date. Integrated perforating systems, which are less than 2% of the cost of completing a well, enable safer and significantly more efficient frac operations at a much lower total cost than conventional field assembled systems. After a challenging year, our businesses are again operating at full speed and our teams are back in the market visiting customers and meeting with suppliers. I want to thank our employees for their continued diligence, creativity, and dedication to the success of DMC. I'll now turn the call over to Mike for a review of our first quarter financial performance and a look at second quarter guidance. Mike?