DMC Global Inc.

Greetings. Welcome to the DMC Global Fourth Quarter and Full Year Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I'll now turn the conference over to your host, Jeff Hyde, VP of Investment Relations. You may begin.

Hello, and welcome to DMC's Fourth Quarter Conference Call. Presenting today are DMC CEO Michael Kuda and Chief Financial Officer Eric Walter. 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. Today's earnings release and a related presentation on our fourth quarter performance are available on the investors page of our website located at dmcglobal.com. A webcast replay of today's presentation will be available at our website shortly after the conclusion of this call. And with that, I'll turn the call over to Michael Kuda. Mike?

Hello and thank you for joining us for today's call. Our 2023 fourth quarter closed out a pivotal year for DMC. Full year accomplishments included new records for several key financial metrics including sales, adjusted EBITDA, and free cash flow. We also made key additions to DMC's leadership team and board of directors. We enhanced the operating strategies at our three business units while also reducing costs across the organization. And we initiated a detailed review of our portfolio strategy as we seek to unlock long-term value for DMC stakeholders. Looking at the fourth quarter, our manufacturing businesses reported varying conditions in their industrial end markets. Arcadia, which serves the commercial and high-end residential building products market, reported a 9% year-over-year sales decline, which is due principally to lower aluminum prices. During the quarter, Arcadia completed the first phase of a paint capacity expansion, a key strategic objective. A second expansion is planned for the back half of this year. Current market conditions have led to a soft start to the year at Arcadia, but we believe results will improve throughout the balance of 2024. Dyne Energetics, our oilfield products business, reported another strong quarter in its international markets. This solidified a new full year record for international sales, which were up 28% versus 2022. In Dyna's North American market, fourth quarter unit sales of our flagship DynaStage system increased 4% sequentially. However, customer consolidation led to pricing pressure reducing our overall EBITDA margins to 12.3%. Automation and operational excellence initiatives coming online in 2024 should improve Dyna's profitability. In addition, we expect new premium product offerings will support our margin improvement efforts. Dyna is working to ramp up production of its new Gravity 2.0 perforating system, which is the lightest, most compact, self-orienting system on the market and is generating strong end-user demand. Nobel Clatter composite metals business delivered another outstanding quarter. Sales were up 33% year-over-year and adjusted EBITDA margins came in at approximately 25%. reflecting a very favorable project mix. Nobel-CLAD continues to benefit from healthy activity in its global end markets. It is also capitalizing on strong demand and improved production capabilities for its Solyndra cryogenic transition joints. Last month, we formally announced our intent to simplify the DMC portfolio as part of a broader effort to enhance shareholder value. We are pursuing separate strategic alternatives for Dynaenergetics and NovoClad with the help of our financial advisors. By streamlining our portfolio, we can sharpen our focus on the growth and profitability of Arcadia, which benefits from a strong brand, a differentiated business model, and a large addressable market. We've also strengthened our capital structure and improved our financial flexibility as we embark on a broad range of growth opportunities at Arcadia. I'm excited about DMC's strategic direction and encouraged by our prospects for long-range growth. I'll now turn the call over to Eric for a closer look at our fourth quarter financial results and a review of our guidance.