DMC Global Inc.

Good afternoon, ladies and gentlemen, and welcome to the ZMC Global Third Quarter Earnings Call. At this time, all participants are in 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 Investor Relations. Sir, the floor is yours.

Hello, and welcome to DMC's Third 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. Activity in DMC's primary end markets continued to improve during the third quarter, However, the recovery was accompanied by various short-term challenges that negatively affected our operational and financial performance. Supply chain bottlenecks and travel restrictions impacted international sales at DynEnergetics, our energy products business, while delayed deliveries of metal plates slowed manufacturing activity at Nobleclad, our composite metals business. These factors led to consolidated third quarter sales that were 4% or $2.8 million below the low end of our forecasted range. An important development during the quarter was the improved demand DynEnergetics experience in its U.S. onshore oil and gas market. Third quarter unit sales of DynEnergetics fully integrated factory assembled DS perforating systems increased 19% versus the second quarter. This was well above the increase in unconventional well completions, which were up 6% sequentially, according to the U.S. Energy Information Administration. As unconventional completion activity accelerates, the superior safety, efficiency, and reliability of our DS systems becomes increasingly important to our customers. This is especially true in a tight labor market. Since DS systems are delivered just in time to the well site, our customers can streamline their supply chain, eliminate assembly operations, and reduce the number of people on location. While well completion activity improved during the quarter, pricing pressure remained a significant challenge. Rising labor and raw material costs have only intensified the pressure on margin. Crude prices have increased approximately 75% since the start of the year, and it's significantly improved the health of the exploration and production industry. Operators are now increasing their capital spending budgets in anticipation of the coming year, and we believe this should help improve the health and profitability of the industry that supports these E&P companies. On Tuesday, DynEnergetics announced a 5% global price increase, that will take effect on November 22nd. The increase is intended to offset higher labor and input costs, as well as the anticipated wind down of the CARES Act. DynEnergetic's substantial investments in new technologies have resulted in a robust product portfolio that has improved the safety, efficiency, and effectiveness of our customers' operations, and has led to increased productivity profitability and job creation in our industry. The significance of these investments is reflected in the approximately 80 patents we have been granted and the more than 400 patent applications we have filed. Our patent strategy is designed to protect our investments and provide transparency so others can innovate without violating our intellectual property. Despite this, a number of competitors are selling products that we believe infringe on DynEnergetics patents. During the third quarter, we intensified our legal action against several of these companies, spending $2.3 million on patent litigation. We intend to continue these expenditures until the issues are resolved. Our commitment of resources to this process reflects our belief that if intellectual property is not protected, the incentive to innovate is lost and the sustainability of the industry is threatened. The outlook in Dynanergetics international markets is improving. Dynanergetics recently entered into a global supply agreement with a large international service company and also was awarded two Middle Eastern projects that will be shipped over the next few quarters. Based on current activity, all indications are that 2022 will be a strong year for Dyna Energetics international business. At Novoclad, interest continues to grow for the new Datapipe product offering, and we anticipate initial orders by early next year. In addition, pricing continues to strengthen for various cladding metals, and Novoclad has improved its commercial organization and strengthened its sales team and market specialists. We are encouraged by the strengthening economy and improving demand in our key markets. We have maintained a strong financial position and operate two highly innovative businesses that continue to lead their industries. With that, I'll turn the call over to Mike for a review of our third quarter financial results and a look at fourth quarter guidance. Mike?