DMC Global Inc. (NASDAQ:BOOM) Q1 2024 Earnings Conference Call May 2, 2024 5:00 PM ET

Company Participants

Geoff High - Vice President, Investor Relations
Michael Kuta - Chief Executive Officer
Eric Walter - Chief Financial Officer

Conference Call Participants

Ken Newman - KeyBanc Capital Markets
Stephen Gengaro - Stifel
Gerry Sweeney - ROTH Capital Partners

Operator

Greetings, and welcome to the DMC Global First Quarter Earnings Release and Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Geoff High, Vice President of IR. Thank you, Geoff. You may begin.

Geoff High

Hello, and welcome to DMC’s first quarter conference call. Presenting today are DMC 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 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.

With that, I’ll now turn the call over to Michael Kuta. Michael?

Michael Kuta

Hello and thank you for joining us for today’s call. DMC’s first quarter financial results included consolidated sales of $167 million, down 9% from the first quarter a year ago. This decrease was largely due to soft demand and lower pricing at Arcadia products, our architectural building products business. Arcadia sales of $61.9 million were down 23% compared with the year ago first quarter.

We noted during our last earnings call that Arcadia was experiencing a slow start to the year due to weak market conditions in the Western and Southwestern United States. Demand declined further in March, particularly for short-cycle orders at several of our large regional service centers as well as for our ultra high-end residential products. The weakness in our short-cycle commercial business aligns with the Architectural Billings Index, which is a leading indicator for commercial construction activity. March was the 14th consecutive monthly ABI decline nationally. In the Western U.S., the index fell sharply during last year’s third quarter. Since the ABI tends to lead nonresidential construction by 9 to 12 months, we believe we are now seeing the impact of that decline.