DMC Global Inc.

Greetings and welcome to the DMC Global First 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 during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jeff High. Please go ahead.

Hello and welcome to DMC's first quarter conference call. Presenting today are 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 of 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 first 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 Jim O'Leary. Jim?

Thanks, Jeff, and thanks to everyone for joining us today. The macroeconomic challenges that persisted throughout 2025 carried into the first quarter and continued to pressure our construction, energy, and industrial end markets. In late February, the onset of the Middle East conflict intensified these headwinds, disrupting supply chains and international oil production while fueling raw material inflation, particularly for aluminum, which is by far Arcadia's biggest cost. Despite these challenges, we delivered financial results that were within our admittedly moderated expectation range. Also, despite all this macroeconomic turmoil, there are some longer-term green shoots we're hearing about that are worth mentioning, which we'll discuss later in the call. First quarter consolidated sales were $135.6 million, down 15% from the 2025 first quarter and down 6% sequentially. Adjusted EBITDA attributable to DMC was $3.9 million, compared with $14.4 million in last year's first quarter and a negative $1.6 million in the fourth quarter. Arcadia, our building products business, reported first quarter sales of $56.7 million, down 14% versus the year-ago quarter, and flat sequentially. The year-over-year decline was principally due to the timing of a large mixed-use project in Southern California that benefited last year's first quarter. Demand in this year's first quarter remained soft across both commercial and residential construction markets, as sharply higher aluminum prices and persistently high interest rates continue to weigh on project activity and customer demand. Average aluminum costs reach multi-year highs during the first quarter, increasing 64% year-over-year and 16% sequentially. A competitive bidding environment also continues to pressure pricing. First quarter adjusted EBITDA attributable to DMC was $2.3 million, down from 5.6 in the 2025 first quarter and 2.4 million in the prior year quarter. At Dyna Energetics, our energy products business, sales were $59.5 million, down 9% year-over-year and down 14% sequentially. The declines were driven by lower product sales in North America, where well-completion activity continued to decline and pricing remained competitive. In addition, the conflict in the Middle East delayed customer shipments into that region. First quarter adjusted EBITDA was $2.7 million compared to $7.4 million in the year-ago quarter and a negative 2.7 in the prior quarter. The year-over-year decline was primarily driven by tariffs implemented in April 2025, and the sequential improvement reflects the absence of discrete AR and inventory charges in the fourth quarter. At Nobleclad, our composite metal business, first quarter sales were 19.3 million, a 31% year-over-year decline, driven primarily by the timing of large project shipments, It benefited the prior year period, as well as reduced bookings in the first half of 2025 due to uncertainty around U.S. and reciprocal tariff policies. Sequentially, sales increased 9%, supported by initial deliveries on a large international petrochemical project. We expect additional shipments from this project throughout the remainder of the year. Noble Cloud's adjusted EBITDA was $1.9 million compared with $5.4 million in the year-ago quarter and $2.1 million in the previous quarter. Quarter backlog at the end of the first quarter increased 12% sequentially to $70.3 million, marking the highest level in more than 15 years. Now I'll turn it over to Eric for more detail on our first quarter results and a look at second quarter guidance.