DMC Global Inc.

Greetings and welcome to the DMC Global Second Quarter 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jeff High, Vice President of Investor Relations. Please go ahead.

Hello and welcome to DMC's Second Quarter Conference Call. Presenting today, our President and CEO, Jim O'Leary, 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 second 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 now turn the call over to Jim O'Leary. Jim?

Thanks, Jeff, and thanks to everyone for joining us for today's call. In a volatile environment marked by shifting tariff policies and highly challenged visibility, our businesses remain focused on their operating initiatives, helping us exceed our EBITDA guidance range of $10 to $13 million for the second quarter. At the same time, we've made progress on our most important overall objective, the leveraging our balance sheet. Second quarter consolidated sales were $155.5 million, while adjusted EBITDA attributable to DMC was $13.5 million. At Arcadia, our building products business, second quarter sales totaled $62 million, down 5% sequentially and 11% from the year-ago period. Last year's second quarter benefited from much stronger demand for high-end residential and commercial exterior products. As expected and previously discussed, this year's second quarter reflects nationwide weakness in the high-end residential market and in construction activity more broadly. Building activity in all segments continues to be challenged by persistently high interest rates. Management recently right-sized the cost structure of its residential offering to align with current market activity while refocusing on its core exterior operations, which generate approximately 75% of the segment sales. Arcadia's second quarter sales also reflect the anticipated and previously discussed drop in project billings following the completion of a large mixed-use development project in California that benefited the previous quarter. At Dyna Energetics, our energy products business, sales were $66.9 million, up 2% sequentially, but down 12% year-over-year. That decline versus prior year reflects pricing pressure and weaker demand in our core U.S. unconventional market, where the number of rigs, well completions, and active frack crews are at or near multi-year lows. At Nobleclad, our composite metals business, second quarter sales were $26.6 million, down 5% sequentially and up 6% year over year. Nobleclad's order backlog at quarter end was $37 million versus $41 million at the end of the first quarter. This decline reflects a sharp slowdown in bookings as customers await clarity on tariff actions or have settled on using alternative clad solutions from suppliers not impacted by tariffs. We believe we've lost some business in recent months to non-U.S. suppliers due to tariff-driven cost increases and a willingness by Canadian customers in particular to buy non-U.S. product. On a more positive note, during the second quarter, we drove a meaningful improvement in DMC's financial position. Total debt at the end of the quarter was $59 million, down 17% from the previous quarter, as we focused on our most important objective, strengthening our balance sheet in advance of the unwinding of the Arcadia put call. I'll now turn the call over to Eric for a closer look at our second quarter financial results and our outlook for the third quarter.