BOOM 10-K & 10-Q changes, risk factors and insider trading

Summary of MaterialPrincipal Risk Factors

The following is a summary of the materialprincipal risk factors that could adversely affect our business, financial condition, and results of operations. This summary should be read together with the more detailed descriptions of risks relating to our Company below.

•Demand for DynaEnergetics’ products is substantially dependent on the levels of capital expenditures by the oil and gas industry. Decreases or expected decreases in oil and gas prices and reduced expenditures in the oil and gas industry could have a material adverse impacteffect on our financial condition, results of operations and cash flows.

•ConsolidationCustomer concentration or consolidation of our customers and competitors may impact our results of operations.

•Inflation and higherelevated interest rates have, and may continue to, adversely affect our financial position and results of operations.

•Our business, financial condition and results of operations could be adversely affected by disruptions in the global and European economies caused by the ongoing military actionconflict between Russia and Ukraine.Ukraine and instability in the Middle East.

•The price and trading volume of our common stock has been and may continue to be volatile, which may make it difficult for youinvestors to resell the common stock whenat youattractive wanttiming or at prices you find attractive.pricing.

Our Arcadia Products business is significantly influenced by North American economic conditions and the cyclical nature of the North American commercial and residential construction industry. The construction industry is impacted by macroeconomic trends, such as availability of credit, employment levels, consumer confidence, interest rates and commodity prices. RecentContinued inflationary pressure, a high-interest rate environment, and rising inflation, interest rates, and construction costs have reduced, and could continue to reduce, the demand for our products and impact our profitability. HigherElevated interest rates make it more expensive to finance construction projects, and as a result, may reduce the demand for our products. In addition, changes in architectural design trends, demographic trends, and/or remote work trends could negatively impact demand for our products. To the extent changes in these factors negatively impact the overall commercial construction industry, our revenue and profits could be significantly reduced.

Our suppliers are subject to fluctuations in general economic cycles. Global economic conditions and political and economic instability may impact their ability to operate their businesses, including the ongoing military actionconflict between Russia and UkraineUkraine, unrest in the Middle East, and related government actions. Some of our suppliers have been and may continue to be negatively impacted by the costs or availability of raw materials, labor and transportation, and they may not be able to handle commodity cost volatility or changing volumes while still performing up to our specifications. These factors may cause suppliers to be unable to meet their commitments or to negatively change the terms of supply arrangements.

Demand for DynaEnergetics’ products is substantially dependent on the levels of capital expenditures by the oil and gas industry. Decreases or expected decreases in oil and gas prices and reduced expenditures in the oil and gas industry could have a material adverse impacteffect on our financial condition, results of operations and cash flows.

Demand for the majority of DynaEnergetics'DynaEnergetics’ products depends substantially on the level of expenditures by the oil and gas industry for the exploration, development and production of oil and natural gas reserves. These expenditures are generally dependent on the industry’s view of future oil and natural gas prices and are sensitive to the industry’s view of future economic growth and the resulting impact on demand for oil and natural gas. HigherIndustry oil and gas prices have resulted in increasing North American completion activityconsolidation and increased expenditurescosts byhave thecaused E&P companies to decrease investment in U.S. land-based drilling, completion, and production activities. This decreased investment, combined with ongoing uncertainty regarding future crude oil and gas industry. Thisdemand, has resulted in increasedcompetitive cash flows for E&P companies; however, E&P companies are still seeking to control their cost of operationspressures and thisreduced has continued to contribute to downward pressure onthe prices we can charge for our products. In addition, the oil and gas industry has historically been cyclical, and to date in 2025,2026, oil prices have declined significantly from their 2022 highs. When oil prices decline, we would expect an increased risk of reduced or delayed oil and gas exploration and production spending, project modifications, delays or cancellations, general business disruptions, and delays in payment of, or nonpayment of, amounts that are owed to us, all of which could result in reduced demand for our products, downward pressure on selling prices for our products and decreased revenues and profits. These effects would likely have a material adverse effect on our financial condition, results of operations and cash flows.

•changes in governmental policies, subsidies, orsanctions, sanctionsand tariffs;

ConsolidationCustomer concentration or consolidation of our customers and competitors may impact our results of operations.

The oil and gas industry has historically experienced periods of consolidation which may result in reduced capital spending by some of our customers, the acquisition of one or more of our primary customers, or competitors and consolidated entities using size and purchasing power to seek pricing or other concessions, which may lead to decreased demand or pricing for our products. We are continuing to experience significant customer concentration and customer consolidation, resulting in certain customers having substantial negotiating leverage, which has negatively impacted our pricing, margins and profitability.profitability, as well as increasing accounts receivable concentration among fewer customers. During the year ended December 31, 2024,2025, one DynaEnergetics customer accounted for approximately 23%26% of consolidated net sales of the Company. In addition, recent, ongoing and future mergers, combinations and consolidations in our industry could result in existing competitors increasing their market share. As a result, industry consolidation may have a significant negative impact on our results of operations, financial position or cash flows.

The markets in which we operate are highly competitive. DynaEnergetics competes with a broad spectrum of companies that produce and market perforating services and products. Many of these companies are large national and multi-national companies, including the oil and natural gas industry’s largest oilfield service providers. These companies have longer operating histories, greater financial, technical, and other resources, and greater name recognition than we do. In addition, we compete with many smaller companies capable of competing effectively on a regional or local basis. Our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. To remain competitive, DynaEnergetics must continue to provide innovative products at competitive prices and maintain an excellent reputation for value, quality, on-time delivery, and safety. If we fail to compete successfully against our competition, we may be unable to maintain acceptable sales levels, prices and margins for our products, which could have a material adverse effect on our business, financial condition, and results of operationsoperations.

From time to time, our business has engaged in strategic initiatives, and such activities may occur in the future. These efforts have recently included a series of automation, lean manufacturing and cost-reduction initiatives designed to enhance profitability and improve quality. While we expect meaningful financial benefits from our strategic initiatives, weWe may not realize the full benefits expected within the anticipated timeframe. Adverse effects from strategy-driven organizational changes could interfere with our realization of anticipated synergies, customer service improvements and cost savings from these strategic initiatives. Additionally, our ability to fully realize the benefits and implement strategic initiatives may be limited by certain contractual commitments. Moreover, we may incur substantial expenses in connection with the execution of strategic plans in excess of what is forecasted. Further, strategic initiatives can be a complex and time-consuming process that can place substantial demands on management, which could divert attention from other business priorities or disrupt our daily operations. Any of these failures could materially adversely affect our business, financial condition, results of operations and cash flows, which could constrain our liquidity.

Demand for DynaEnergeticsDynaEnergetics’ products could be reduced by existing and future legislation, regulations and public sentiment.

Regulatory agencies and environmental advocacy groups in the United States, the E.U., and other regions or countries have been focusing considerable attention on emissions of carbon dioxide, methane and other greenhouse gases and their role in climate change. There is also increased focus, including by governments and our customers, investors and other stakeholders, on these and other sustainability and energy transition matters. Existing or future legislation and regulations related to greenhouse gas emissions and climate change, as well as initiatives by governments, non-governmental organizations, and companies to conserve energy or promote the use of alternative energy sources, and negative attitudes toward or perceptions of fossil fuel products and their relationship to the environment, may significantly curtail demand for and production of oil and gas in areas of the world where our customers operate, and thus reduce future demand for DynaEnergeticsDynaEnergetics’ products.

NobelClad revenues are affected by the demand for explosion-welded clad solutions, the base price of metal used in explosion-welded cladding operations and the growing adoption of products and vessels manufactured in China and India. The explosive welding clad market is dependent upon sales of products for use by customers in a limited number of heavy industries, including oil and gas, chemicals and petrochemicals, alternative energy, hydrometallurgy, aluminum production, shipbuilding, rail car manufacturing, power generation, and industrial refrigeration. These industries tend to be cyclical in nature and an economic slowdown in one or all of these industries, whether due to traditional cyclicality, general economic conditions or other industry-specific factors, could impact capital expenditures within that industry.

Metals prices affect the demand for cladded products and our margins, with higher metal prices generally increasing demand for use of cladded materials over solid metals, which leads to higher sales (in terms of dollars rather than square meters of cladding) and generally higher margins for NobelClad. Additionally,Our thebusiness U.S.is government’ssubject evolving tariff policy and responses thereto could increase metal prices but also createto volatility and uncertainty, potentially delaying investment decisions from end users and impacting the competitiveness of some customers. After several years of historically low metal prices, NobelClad experienced a sharp and significant rise in metal prices and tariffs. Recent increases in 2021,U.S. followedtariffs on metals, as well as retaliatory measures by aother returncountries or any further changes to levelsglobal moretrade consistent with historical averages by the end of 2023. While pricespolicy, have stabilized,and theymay remain above the average levels observed priorcontinue to 2021,adversely however,affect there can be no assurance that prices will remain at these levels,margins, and disrupt supply chainchains. difficulties,Higher governmentmaterial policy,costs andmay othercause uncertaintiescustomers couldto disruptdelay projects and normalreduce sales cycles.demand. If demand or metals prices decline or if supply chain issues or similar disruptions persist, our sales would be adversely affected, and this could have a material adverse effect on our business, financial condition, and results of operations.

Our cladding process involves the detonation of large amounts of explosives. As a result, the sites where we perform cladding must meet certain criteria, including adequate distance from densely populated areas, specific geological characteristics, and the ability to comply with local noise and vibration abatement regulations in conducting the process. Our shootingcladding sites in Pennsylvania and in Germany are located in mines. Our Pennsylvania shootingcladding site is subleased under an arrangement pursuant to which we provide certain contractual services to the sub-landlord, and this sublease expires in 2054. Our shootingcladding sites require ongoing maintenance and investment, and failure to adequately maintain these sites could result in reduced access or capacity constraints. In addition, we could experience difficulty in obtaining or renewing permits because of resistance from residents in the vicinity of existing or proposed sites. The failure to obtain required governmental approvals or permits could limit our ability to expand our cladding business in the future, and the failure to maintain such permits or satisfy other conditions to use the sites would have a material adverse effect on our business, financial condition and results of operations.

Our product warranties against technical defects of our clad products vary depending on our purchase orders with customers. The warranties require us to repair or replace defective products and may require the payment of a certain percentage of the purchase price as liquidated damages for our failure to meet the specified product specifications and delivery requirements. In addition, our clad products are often used as part of larger projects or are used in potentially hazardous and highly regulated applications thatsuch as power generation, LNG facilities, spacecraft, and air-compression systems, where failures can causehave safety, environmental, and operational consequences, including injury or loss of life and damage to property or equipment. In the event of an actual or alleged product defect, we may be named as a defendant in product liability or other lawsuits asserting potentially large claims. Given that such incidents could carry heightened visibility and risk, our potential exposure may be disproportionally significant. We cannot guarantee that insurance will be available or adequate to cover any or all liabilities incurred. We generally have not established any reserve funds for potential warranty claims since historically we have experienced few warranty claims for our products and the costs associated with our warranty claims have been low. If we experience an increase in warranty claims or if our repair and replacement costs associated with warranty claims increase significantly, it could have a material adverse effect on our business, financial condition and results of operations.

We continuously evaluate opportunities for growth and change. These initiatives may involve making acquisitions, entering into partnerships and joint ventures, divesting assets, restructuring our existing operations and assets, creating new financial structures and building new facilities—facilities, any of which could require a significant investment and subject us to new risks. We may incur additional indebtedness to finance these opportunities. If our strategies for growth and change are not successful, we could face increased financial pressure, such as increased cash flow demands, reduced liquidity and diminished access to financial markets, and the equity value of our businesses could be diluted.

● •diversion of managementmanagement’s time and attention away from existing operations;

● •requiring capital investment that could otherwise be used for the operation and growth of our existing businesses;

● •disruptions to important business relationships;

● •increased operating costs;

● •limitations imposed by various governmental entities; and

● •difficulties due to lack of or limited prior experience in any new markets we may enter.

•civil unrest, acts of terrorism, force majeure, war, or other armed conflict;

•trade and economic sanctions or other restrictions;

Inflation and higherelevated interest rates have, and may continue to, adversely affect our financial position and results of operations.

IncreasesOur inbusiness and financial results could continue to be adversely affected by significant inflation and higher interest rates. During the past three years, the global economy has experienced significant inflationary pressures. Inflation has, and could continue to, adversely affect us by increasing the cost of wages,labor, materials, parts, equipment, transportation and other operational componentscomponents. overThis the past two years havehas adversely affected our results of operations, cash flows and financial position by increasing our overall cost structure, and could continue to do so, particularly if we are unable to achieve commensurate increases in the prices we charge our customers for our products.

In addition, higherAlthough interest rates inhave themoderated U.S.from haverecent highs, they remain elevated, which has increased the cost of debt, investment, and construction costs. Higher interest rates make it more expensive for our customers to finance projects in certain of our business segments, and as a result, may continue to reduce the demand for our products and impact our profitability. Furthermore, higher interest rates decrease cash available for debt repayment as our credit facility bears a variable interest rate.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global and European economies caused by the ongoing military actionconflict between Russia and Ukraine.Ukraine and instability in the Middle East.

In February of 2022, Russian military forces invaded Ukraine, resulting in conflict and disruption in the region. More recently, the outbreak of hostilities between Israel and Hamas has created additional instability in the Middle East. The length, impact and outcome of thethese ongoing military conflict in Ukraineconflicts is highly unpredictable. ThisThese conflictconflicts hashave also led and may continue to lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, higher inflation, supply chain interruptions, increased costs for transportation and raw materials, political and social instability, as well as an increase in cyberattacks and espionage. Furthermore, governments in the United States, the European Union, the United Kingdom, Canada and others have imposed financial and economic sanctions on certain industry segments and various parties in Russia.Russia, and may impose additional restrictions in connection with Middle East conflicts. We continue to monitor thethese conflictconflicts, including the potential impact of financial and economic sanctions on the global economy and particularly the economies of Europe.Europe and the Middle East. Increased trade barriers, sanctions and other restrictions on global or regional trade could adversely affect our business, financial condition and results of operations. Further escalation of geopolitical tensions related to thisthese military conflictconflicts and/or itstheir expansion could result in loss of property, expropriation, cyberattacks, supply disruptions, plant closures and an inability to obtain key supplies and materials, as well as adversely affect both our and our customers'customers’ supply chains and logistics, particularly in Europe.

In many cases, both our German operations and those of European customers and suppliers depend on the availability of natural gas for use in their manufacturing operations. A significant proportion of Germany'sGermany’s natural gas supply has historically originated from Russia. Material disruptions of natural gas supply to EuropeEurope, and in particular Germany, whether from sanctions, counter-measures by Russia, other restrictions, damage to infrastructure and logistics or otherwise from the destabilizing effects of military conflict could materially and adversely impact European and global natural gas and oil markets. We expect that shortages in supply and increases in costs of natural gas or other energy will adversely impact our ability to operate our German manufacturing facilities as efficiently and cost-effectively as previously, which could adversely affect our business, results of operations and financial condition.

We have experienced, and expect to continue to experience, fluctuations in annual and quarterly operating results caused by various factors atimpacting our businesses. At NobelClad, quarterly sales and operating results depend on the volume and timing of the orders in our backlog as well as bookings during the quarter. At DynaEnergetics, the level of demand from our customers is impacted by oil and gas prices as well as a variety of other factors and can vary significantly from quarter to quarter. At Arcadia Products, operating results can fluctuate due to price movements in the market for raw aluminum. Portions of our operating expenses are fixed, and planned expenditures are based primarily on sales forecasts and product development programs. If sales do not meet our expectations in any given period, the adverse impact on operating results may be magnified by our inability to adjust operating expenses sufficiently or quickly enough to compensate for such a shortfall. Results of operations in any period should not be considered indicative of the results for any future period.

Our operations are dependent upon the continued ability of our suppliers to deliver the components, raw materials and parts that we need to manufacture our products. In some instances, we purchase components, raw materials and parts that are ultimately derived from a single source and may be at an increased risk for supply disruptions. Any number of factors, including labor disruptions, acts of war or terrorism, military activity, civil unrest, trade sanctions, catastrophic weather events, the occurrence of a pandemic or other widespread illness, contractual or other disputes, unfavorable economic or industry conditions, transportation disruptions, delivery delays or other performance problems or financial difficulties or solvency problems, could disrupt our suppliers’ operations and performance, which could, in turn, lead to uncertainty in our supply chain or cause supply disruptions for us and disrupt our operations. If we experience supply disruptions, we may not be able to develop alternate sourcing quickly. Any disruption of our production schedule caused by an unexpected shortage of components, raw materials or parts even for a relatively short period of time could cause us to alter production schedules or suspend production entirely, which would adversely affect our business and results of operations.

As of December 31, 2024,2025, we had an outstanding balance of $72.5$52.0 million on our syndicated credit agreement, which was amended on February 6, 2024.2024, and June 10, 2025. This agreement, as amended, includes various covenants and restrictions and certain of these relate to the incurrence of additional indebtedness and the mortgaging, pledging or disposing of major assets. We are also required to maintain certain financial ratios on a quarterly basis. A breach of any of these covenants could impair our ability to borrow and could result in acceleration of our obligations to repay our debt if we are unable to obtain a waiver or amendment from our lenders. As of December 31, 2024,2025, we were in compliance with all financial covenants and other provisions of the credit agreement, as amended, and our other loan agreements. Any failure to remain in compliance with any material provision or covenant of our credit agreement could result in a default, which would, absent a waiver or amendment, require immediate repayment of outstanding indebtedness under our credit facilities. We may not have or be able to obtain sufficient funds to satisfy such a repayment obligation.

New or existing tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows, either directly or indirectly through various adverse impacts on our significant customers. In 2018,2025, the U.S. announced and implemented substantial new tariffs on imports from a wide range of 25countries, percentincluding on steel and 10 percent on aluminum imported from countriesChina, where we typically source metals.metal. These tariffsactions were met withprompted retaliatory tariffs fromby certainseveral countries and increased,set broaderoff a cycle of retaliatory tariffs wereby levied byboth the U.S. and other countries. Also in 2025, the U.S. increased tariffs on targetedsteel countries,and includingaluminum China.to The50 tariffspercent. These higher tariffs, along with broader measures targeting countries such as China, have significantly impacted the cost of theimporting importationsteel ofand steel,aluminum. which weWe utilize steel in our steel plate and steel pipe,pipe as key materials in our NobelClad and DynaEnergetics businesses.businesses, Thoughand aluminum as a key material in manyour casesArcadia Products business. While we have been able to source some metals fromdomestically, domestic suppliers, somecertain materials are only available from sources subject to tariffs. The cost of domestic steel and aluminum also increased, along with the price of delivery, and the availability of certain materials has been limited.delivery. These higher costs have increased the price of certain of our products to our customers and, in some instances, affected our ability to be competitive. For our NobelClad business, this has impacted our ability to compete on international projects and negatively impacted U.S. fabricators, which are the primary consumers of NobelClad products. For our DynaEnergetics and Arcadia Products businesses, this has resulted in margin compression in core energy and construction markets. These new tariffs have had, and continue to have, an impact on our financial condition and results of operations.

The following discussion should be read in conjunction with our historical Consolidated Financial Statements and notes included elsewhere in this annual report. A discussion regarding our financial condition and results of operations as well as our liquidity and capital resources for fiscal 20232024 compared to fiscal 20222023 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023,2024, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at www.dmcglobal.com/investors.ir.dmcglobal.com.

Unless stated otherwise, all dollar figures in this report are presented in thousands (000s). N/M indicates that the change in dollars or percentage was not meaningful.

DMC Global Inc. (“DMC”, "“we"”, "“us"”, "“our"”, or the "“Company"”) ownsoperates andthree operatesmanufacturing businesses: Arcadia Products, DynaEnergetics and NobelClad, threewhich innovative, asset-light manufacturing businesses that provideproduce differentiated products and engineered solutions toprimarily segments offor the construction, energy, and industrial processing and transportation markets. Our businesses seek to capitalize on their product and service differentiation to expand profit margins, increase cash flow and enhance shareholder value. Based in Broomfield, Colorado, DMCDMC’s common stock trades on Nasdaq under the symbol “BOOM.”

NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion resistantcorrosion-resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas (LNG) processing equipment. While most demand for our products is driven by maintenance and retrofit projects at existing plants and facilities, new projects for petrochemical processing, oil refining, and aluminum smelting facilities also account for a significant portion of total demand. These industries tend to be cyclical in naturenature, and the timing of new order inflow remains difficult to predict. We use backlog, defined as all unfilled firm purchase orders and commitments at a point in time, to measure the immediate outlook for our NobelClad business. Most firm purchase orders and commitments are realized and shipped within twelve months. NobelClad's backlog was $48,885 at December 31, 2024 compared to $59,357 at December 31, 2023.

•Consolidated gross profit of 23.4%22.2% in 20242025 decreased from 29.5%23.4% in 2023.2024. The decline was primarily attributable to marginless declinesfavorable project and regional mix at DynaEnergetics and Arcadia Products,NobelClad, as well as lower absorption of fixed manufacturing overhead costs as a result of the decrease in consolidatednet sales.sales at both DynaEnergetics and NobelClad.

•Consolidated selling, general, and administrative ("“SG&A"”) expenses were $108,656$110,042 in 20242025, compared with $124,442$108,656 in 2023.2024. The year-over-year decreaseincrease was primarily attributable to ahigher reduction in variable compensation costs of $5,297, outside services costs of $5,735, as well as internal leadership and sales meeting expense of $1,176, partially offset by an increase innet bad debt expense of $3,784.$1,153, Additionally,executive theretransition were $7,383costs of CEO transition expenses$520, and relatedprofessional acceleratedservices stock-basedfees compensationof $152, partially offset by a decrease in 2023.business-related travel of $1,043.

•Net debt, a non-GAAP measure, of $56,529$18,746 (comprised of $70,818$50,644 of total debt less $14,289$31,898 in consolidated cash, cash equivalents and marketable securities) at December 31, 20242025, decreased $15,663$37,783 from $72,192$56,529 at December 31, 2023.2024. The decrease was duedriven toby voluntary credit facility repayments resulting in a reduction in outstanding debt attributableand toan voluntaryincrease repaymentsin madeconsolidated aftercash, executioncash ofequivalents and marketable securities compared with the creditsame agreement amendmentperiod in February 2024.

•The Company’s leverage ratio, calculated in accordance with its credit facility, was 1.35 to 1.01.22x as of December 31, 20242025, and 1.35x as of December 31, 2024, in comparison to the maximum ratio permitted of 3.03.0x tofor 1.0.each of the periods. The Company’s adjusted leverage ratio, calculated using net debt as of December 31, 2025, and 2024, was 1.090.47x, toand 1.0.1.09x, respectively.

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also discloses certain non-GAAP financial measures that we use in operational and financial decision making. Non-GAAP financial measures include the following:

•Net debt: defined as total debt less totalconsolidated cash, cash equivalents and marketable securities.securities per the Consolidated Balance Sheets.

Management believes providing these additional financial measures is useful to investors in understanding the Company’s operating performance, excluding the effects of restructuring, asset impairment, and other nonrecurring charges, as well as its liquidity. Management typically monitors the business utilizing the above non-GAAP measures, in addition to GAAP results, to understand and compare operating results across accounting periods, and certain management incentive awards are based, in part, on these measures. The presence of non-GAAP financial measures in this report is not intended to suggest that such measures be considered in isolation or as a substitute for, or as superior to, DMC’s GAAP information, and investors are cautioned that the non-GAAP financial measures are limited in their usefulness. Given that not all companies use identical calculations, DMC’s presentation of non-GAAP financial measures may not be comparable to similarly titled measures of other companies.

Gross profit percentage was 22.2% for the year ended December 31, 2025 compared with 23.4% versusfor 29.5%the inyear 2023.ended December 31, 2024. The decline compared to prior year was primarily attributable to marginless declinesfavorable project and regional mix at DynaEnergetics and Arcadia Products,NobelClad, as well as lower absorption of fixed manufacturing overhead costs as a result of the decrease in consolidatednet sales.sales at both DynaEnergetics and NobelClad.

Selling and distribution expenses decreasedincreased $1,846$1,535 for the year ended December 31, 20242025, compared with 2023. The lower expense was2024, driven by a decrease inhigher compensation costcosts at Arcadia Products of $3,571$1,357 and outsidehigher marketingbad consultingdebt costsexpense of $1,564,$1,153. These increases were partially offset by anlower increaseoutside services costs of $532, a reduction in badbusiness-related debttravel expenseof for$214, $3,784.and lower selling costs of $109.

Goodwill impairment of $141,725 for the year ended December 31, 2024 related to the full impairment of Arcadia Products’ goodwill due in part to recent financial performance not in accordance with expectations and downward revisions to the near-term forecast.goodwill.

Strategic review and related expenses of $7,765$2,690 for the year ended December 31, 20242025 primarily related primarily to the review of strategic alternatives for DynaEnergetics and NobelClad. In connection with this process, strategic review expenses primarily included $4,076$2,099 in professional service fees and $2,988$366 in employee retention compensation, including $372$36 of stock-based compensation. On October 21, 2024, the Company announced that the Board was no longer actively marketing the DynaEnergetics and NobelClad segments.

Restructuring expenses and asset impairments decreasedof $1,240$3,578 for the year ended December 31, 20242025 comparedincluded contract termination costs associated with 2023.exiting 2024leases costsof primarily$1,013 and $605 at NobelClad and DynaEnergetics, respectively, employee severance of $1,175 related to headcount reductions across the Company, and an asset impairment of $785 related to the abandonmentdecision ofto adiscontinue plannedan manufacturinginternal expansion at DynaEnergeticswebsite and employeerelated severanceautomation associated with headcount reductions at DynaEnergetics and Arcadia Products. 2023 costs included $2,471 of asset impairments primarily associated with the abandonment of a software asset at DynaEnergetics and $1,295 of cost reduction initiatives, including employee severance, primarily at DynaEnergetics.platform.

Operating loss of $110 for the year ended December 31, 2025, decreased compared with operating loss of $131,258 for the year ended December 31, 2024 was2024, primarily attributable to the goodwill impairment charge atrecorded Arcadiain Products2024, and decreaseda financial performance at DynaEnergetics. Operating incomereduction in 2023strategic wasreview $61,177.and related expenses.

Other expense, net of $1,068$1,076 in 20242025 primarily related to net realized and unrealized foreign currency exchange losses. Currency gains and losses can arise when subsidiaries enter into inter-company and third-party transactions that are denominated in currencies other than their functional currency, including foreign currency forward contracts used to offset foreign exchange rate fluctuations on certain foreign currency denominated asset and liability positions.

Interest expense, net of $8,664$6,493 in 20242025 decreased 9%25% compared with 2023 due2024, primarily attributable to lower outstanding balances on our credit facility due to voluntary debt repayments during 2024.2025.

We recorded an incomeIncome tax provision of $15,120$4,066 was recorded on incomeloss before income taxes of $49,879$7,679 infor 2023. The priorthe year rateended wasDecember impacted31, by geographical mix.2025. Our most significant operations are in the United States, which has a 21% statutory income tax rate, and Germany, which has a 32% combined statutory income tax rate. The mix of income or loss before income taxes between these jurisdictions is one of the primary drivers of the difference between our 21% statutory tax rate and our effective tax rate. TheAdditionally, the effective rate was also impacted unfavorably by state taxes and certaina compensationvaluation expenses that are not tax deductibleallowance in the U.S. The operatingwhich results of Arcadia that are attributable to the redeemable noncontrolling interest holder are not taxed at DMC, which resulted in ano partiallybenefit offsettingfor favorablelosses impactgenerated to the effective tax rate.domestically.

Net loss attributable to DMC Global Inc. in 20242025 was $13,452, or $(0.90) per diluted share compared with net loss of $94,452, or $(8.20) per diluted share compared with net income of $26,259, or $1.08 per diluted share, in 2023.2024.

Adjusted EBITDA decreased in 2024 decreased2025, compared with 20232024, due to the factors discussed above. See "“Use of Non-GAAP Financial Measures"” above for explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.

Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share decreased compared with 20232024 due to the factors discussed above. See "“Use of Non-GAAP Financial Measures"” above for explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share.

(1) Calculated using diluted weighted average shares outstanding of 19,518,382 (2) Net incomeloss attributable to DMC Global Inc. prior to the adjustment of redeemable noncontrolling interest for purposes of calculating earnings per shareinterest.

We primarily evaluate performance and allocate resources based on segment revenues, operating income (loss) and Adjusted EBITDA as well as projected future performance. Segment operating income (loss) is defined as revenues less expenses identifiable to the segment. DMC consolidated operating income (loss) and Adjusted EBITDA include unallocated corporate expenses and unallocated stock-based compensation expense. Stock-based compensation is not allocated to wholly owned segments, DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia Products segment as 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. Segment operating income (loss) will reconcile to consolidated income (loss) before income taxes by deducting unallocated corporate expenses, unallocated stock-based compensation, other expense, net, and interest expense, net.

Net sales decreased $27,340$3,555 in 20242025, compared towith 20232024, primarily due to alower decreasesales volumes in pricinglonger-cycle ofhigh-end DSresidential perforating systems as a result of industry consolidation in the United States.markets.

In February 2026, the United States and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the region. Although we do not have operations in the Middle East, we sell products into the region, and the ongoing conflict and any further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, cyberattacks, or other governmental or market responses, has and could continue to lead to significant disruption of global energy supplies and increases in global energy prices, heighten inflationary pressures on our input costs and supply chain, adversely affect global supply chains, energy markets, commodity prices, currency exchange rates, interest rates, financial markets and overall macroeconomic conditions, increase the cost or reduce the availability of debt financing, and adversely impact customer spending patterns in markets in which we operate. In particular, the price of aluminum, the most important raw material for Arcadia Products, has increasedrose to a multi-year highhighs earlier in 2026 in part due to the ongoing conflict and the difficulty in sourcing and transporting this material.material, and while prices have since declined from those highs, they remain elevated and volatile and could increase again if disruptions in the region persist or intensify. While the impacts of conflict between the United States, Israel, and Iran may have an adverse effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time.

•Consolidated net sales were $135,595$156,953 in the firstsecond quarter of 2026 versus $159,290$155,487 in the firstsecond quarter of 2025, aan decreaseincrease of 15%.1%. The declineincrease was primarily attributable to higher sales at Arcadia Products, partially offset by lower sales at all three business segments,NobelClad, as described below.

•Arcadia Products reported net sales of $56,706$67,419 in the firstsecond quarter of 2026, representing aan decreaseincrease of 14%9% compared with the firstsecond quarter of 2025. The decreaseincrease was primarily attributable to lowerhigher sales volumes in longer-cycleshort-cycle commercial exterior and high-end residential markets.markets as well as higher customer pricing in response to increases in raw material input costs.

•DynaEnergetics reported net sales of $59,547$67,383 in the firstsecond quarter of 2026, representing aan decreaseincrease of 9%1% compared with the firstsecond quarter of 2025. TheInternational declinesales largelyincreased resulted$2,291 fromdue to project timing. This increase was partially offset by a decrease in sales in our North American market as a result of lower sales volumes and a decrease in pricing due to a highly competitive core North American market,environment, which collectively reduced net sales by $6,908. This decrease was partially offset by an increase in international sales of $904 primarily due to project timing.$1,770.

•NobelClad reported net sales of $19,342$22,151 in the firstsecond quarter of 2026, representing a decrease of 31%17% compared with the firstsecond quarter of 2025 driven by the timing of large project shipments out of backlog and lower activity levels due in part to the impact of evolving tariff policies.

•The Company’s leverage ratio, calculated in accordance with its credit facility, was 1.76x2.19x as of MarchJune 31,30, 2026 in comparison to the maximum ratio permitted of 3.0x. The Company’s adjusted leverage ratio, calculated using net debt, a non-GAAP measure, was 0.76x1.15x as of MarchJune 31,30, 2026.

OurConditions across our three manufacturing businesses continue to closelybe monitorimpacted evolvingby macroeconomic conditions,and geopolitical developments, including the conflict in the Middle EastEast, and other geopolitical and economic challenges, such as volatilityuncertainty in global oil and gas markets, persistently elevated interest rates, and evolvingchanges in global tariff policies. DynaEnergetics and NobelCladNobelClad, which serve the upstream and downstream segments of the oil and gas industry,markets, respectively, andremain continueexposed to addressfluctuations the impacts of volatilein crude oil prices. SalesIf and profitability could be adversely affected if we,we or our customers,customers are unable to mitigateoffset the aboveeffects describedof impacts.these conditions, our net sales and profitability may be adversely affected.

DynaEnergetics is continuing a series of initiatives designed to reduce costs and increase market share. TheseDemand effortsremains aresteady intendedacross toits offsetNorth volatility in crude oil pricesAmerican and potentially lower international activity associated with the current conflict in the Middle East.markets. DynaEnergetics also is pursuing growth opportunities in the enhancedEnhanced geothermalGeothermal marketSystems industry and has expanded its sales and marketing efforts in certain emerging global shale markets.

AtNobelClad NobelClad, we useuses backlog, defined as all unfilled firm purchase orders and commitments at a point in time, to assess near-term demand. Most firm purchase orders and commitments are realized and shipped within 12 months. Order backlog increaseddecreased to $63,508 at the end of the second quarter of 2026, compared with $70,308 at the end of the first quarter of 2026, which was the highest level in more than 15 yearsyears. and up 12%Shipments from $62,612NobelClad’s atorder backlog are expected to accelerate during the endsecond half of the2026 fourth quarter of 2025. We expect shipments of orders associated with the previously announced international petrochemical project toand improve NobelClad’s current year financial performance during 2026.performance. NobelClad is also pursuing additional opportunities with the U.S. Navy following its recently announced plans to accelerate its Naval readiness program.

EachAlthough each of our businesses continue to be affected by challenging end-market conditions, we are evaluatingbeginning to benefit from specific improvement initiatives, most notably at Arcadia Products. However, we continue to evaluate additional mitigation strategies and targeted cost reductioncost-reduction programs if business doesconditions do not improve as 2026 progresses.improve.

Net sales were $135,595$156,953 for the three months ended MarchJune 31,30, 2026, aan decreaseincrease of 15%1% compared with the same period in 2025, due to lower sales at all three business segments.2025. Arcadia Products’ net sales decreasedincreased 14%9% as a result of lowerhigher sales volumes in longer-cycleshort-cycle commercial exterior and high-end residential markets.markets and higher customer pricing. DynaEnergetics’ net sales decreasedincreased 9%1% largely resulting from higher international sales volumes partially offset by lower sales volumes and a decrease in pricing in its core North American market. NobelClad’s net sales decreased 31%17% driven by the timing of large project shipments out of backlog and lower activity levels due in part to the impact of evolving tariff policies.

Gross profit percentage was 18.8%21.9% compared with 25.9%23.6% for the same period in 2025. The decrease was primarily attributable to tariffa impacts which resulteddecrease in pricing in DynaEnergetics’ North American market, as well as an unfavorable mix and higher input costscosts. atThis DynaEnergetics and a less favorable project and regional mix at NobelClad. Additionally, the decline in gross profit percentagedecrease was impactedpartially offset by the lowerimproved absorption of fixed manufacturing overhead costs at allArcadia three business segmentsProducts as a result of thean decreasesincrease in net sales.

General and administrative expenses decreased $2,542$1,989 for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, primarily due to alower decreasecompensation costs, including reductions in compensationheadcount expenseacross ofall $2,293,three lowerbusiness outside services costs of $156, and a decrease in business-related travel of $92.segments.

Selling and distribution expenses decreasedincreased $1,154$383 for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, primarily driven by lowerhigher bad debt expense of $645, a decrease in compensation expenses of $222, and reduced outside servicesselling costs ofat $112.DynaEnergetics.

Amortization of purchased intangible assets decreased $407$406 for the three months ended MarchJune 31,30, 2026, compared to the same period in 2025, as the Arcadia Products customer relationship purchased intangible asset is amortized using an accelerated amortization method.

Strategic review and related expenses of $1,298$775 for the three months ended MarchJune 31,30, 2025 primarily included $932 in professional service fees and $366 in employee retention compensation, including $36 of stock-based compensation.fees.

Restructuring expenses and asset impairments of $566 and $325$239 for the three months ended MarchJune 31,30, 2026,2026 and 2025,primarily related to employee severance associated with headcount reductions at Arcadia ProductsDynaEnergetics and DynaEnergetics.Corporate.

Operating lossincome was $4,083$5,218 for the three months ended MarchJune 31,30, 2026, compared to operating income of $6,513$3,897 in the same period in 2025, primarily due to lowerhigher net sales and corresponding gross profit.profit at Arcadia Products.

Income tax provision of $1,221$1,936 was recorded on lossincome before income taxes of $5,589$3,953 for the three months ended MarchJune 31,30, 2026, and we recorded an income tax provision of $2,733$1,419 on income before income taxes of $4,596$1,740 for the three months ended MarchJune 31,30, 2025. Our most significant operations are in the United States, which has a 21% statutory income tax rate, and Germany, which has a 32% combined statutory income tax rate. The mix of income or loss before income taxes between these jurisdictions is one of the primary drivers of the difference between our 21% statutory tax rate and our effective tax rate. Additionally, the effective rates were impacted unfavorably by state taxes and a valuation allowance in the U.S. which results in no benefit for losses generated domestically. The operating results of Arcadia Products that are attributable to the redeemable noncontrolling interest holder are not taxed at DMC, which resulted in a partially offsetting favorable impact to the effective tax rates.

Net lossincome attributable to DMC Global Inc. for the three months ended MarchJune 31,30, 2026 was $6,065,$507, compared with net income attributable to DMC Global Inc. of $677$116 for the same period in 2025, primarily due to the factors discussed above.

Adjusted EBITDA decreased for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.

Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share decreased for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of non-GAAP measures. The following is a reconciliation of the most directly comparable GAAP measures to Adjusted Net (Loss) Income and Adjusted Diluted Earnings Per Share.

We primarily evaluate performance and allocate resources based on segment revenues, operating income (loss) and Adjusted EBITDA as well as projected future performance. Segment operating income (loss) is defined as revenues less expenses identifiable to the segment. DMC consolidated operating income (loss) and Adjusted EBITDA include unallocated corporate expenses and unallocated stock-based compensation expense. Stock-based compensation is not allocated to wholly owned segments, DynaEnergetics and NobelClad. Stock-based compensation is allocated to the Arcadia Products segment as 60% of such expense is attributable to the Company, whereas the remaining 40% is attributable to the redeemable noncontrolling interest holder. Segment operating income (loss) will reconcile to consolidated income (loss) before income taxes by deducting unallocated corporate expenses, unallocated stock-based compensation, other expense,income (expense), net, and interest expense, net.

Net sales decreasedincreased $8,874$5,439 for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, primarily due to lowerhigher sales volumes in longer-cycleshort-cycle commercial exterior and high-end residential markets.markets as well as higher customer pricing in response to increases in raw material input costs.

Gross profit percentage decreasedincreased to 24.1%27.7% for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025,2026 primarily due to lowerimproved absorption of fixed manufacturing overhead costs as a result of the decreaseincrease in net sales described above.

General and administrative expenses decreased $1,028$284 for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, primarily due to lower compensation costs of $1,015 as a result of a reduction in headcount and lower incentive compensation.headcount.

Amortization of purchased intangible assets decreased $407$406 for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, as the customer relationship purchased intangible asset is amortized using an accelerated amortization method.

Restructuring expenses and asset impairments of $495$47 and $325$192 for the three months ended MarchJune 31,30, 2026, and 2025, respectively, related to employee severance associated with headcount reductions.

Operating lossincome was $2,002$3,645 for the three months ended MarchJune 31,30, 2026, compared to operating income of $2,996$516 in the same period in 2025, primarily due to lowerhigher net sales and corresponding gross profit.

Adjusted EBITDA decreasedincreased for the three months ended MarchJune 31,30, 2026, compared with the same period in 2025, due to the factors discussed above. See “Use of Non-GAAP Financial Measures” above for the explanation of the use of Adjusted EBITDA. The following is a reconciliation of the most directly comparable GAAP measure to Adjusted EBITDA.

Net sales decreasedincreased $6,004$521 for the three months ended MarchJune 31,30, 2026,2026 compared with the same period in 2025,2025. primarilyInternational sales increased $2,291 due to project timing. This increase was partially offset by a decrease in sales in our North American market as a result of lower sales volumes and a decrease in pricing due to a highly competitive core North American market,environment, which collectively reduced net sales by $6,908. This decrease was partially offset by an increase in international sales of $904 primarily due to project timing.$1,770.