DMC Global Inc. (NASDAQ:BOOM) Q4 2023 Earnings Call Transcript February 22, 2024 5:00 PM ET

Company Participants

Geoff High - VP of IR

Michael Kuta - CEO

Eric Walter - CFO

Conference Call Participants

Ken Newman - KeyBanc Capital Markets

Alec Scheibelhoffer - Stifel

Operator

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. [Operator Instructions] I will now turn the conference over to your host, Geoff High, VP of Investor Relations. You may begin.

Geoff High

Hello, and welcome to DMC's fourth quarter conference call. Presenting today are DMC's CEO, Michael Kuta, 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 related presentation on our fourth quarter performance are available on the Investors page of our website site 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 Michael Kuta. Mike?

Michael Kuta

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.