DMC Global (NASDAQ:BOOM) executives said macroeconomic pressures, including tariffs and persistently high interest rates, continued to weigh on the company’s core energy and construction end markets during the fourth quarter and into early 2026, even as management emphasized progress in reducing leverage.
Management highlights macro headwinds, balance sheet progress
President and CEO James O’Leary said tariffs and the “general trend and level of interest rates” have been difficult to forecast and have contributed to weakness across DMC’s oilfield and construction markets. He added that these conditions worsened through 2025 and have persisted into early 2026.
O’Leary also addressed tariff uncertainty, noting the company was reviewing a Supreme Court ruling and subsequent White House response. He said it appeared Section 232 tariffs on steel and aluminum would remain in place, and that DMC was evaluating whether it may be entitled to any refunds, which the court’s ruling did not address.
Fourth-quarter results included discrete charges at DynaEnergetics
For the fourth quarter, DMC reported consolidated sales of $143.5 million, down 6% year-over-year. Adjusted EBITDA attributable to DMC was a loss of $1.6 million, which included about $7 million in discrete accounts receivable and inventory write-offs at DynaEnergetics, with the “majority” tied to accounts receivable reserves, according to CFO Eric Walter.
Walter said adjusted EBITDA inclusive of Arcadia’s non-controlling interest was approximately $61,000, compared with $11.9 million in the prior-year fourth quarter and $12 million in the third quarter.
Fourth-quarter SG&A expense was $29.6 million, or 20.6% of sales, compared with $25.1 million, or 16.5% of sales, in the prior-year quarter. Walter said the increase was primarily related to the discrete accounts receivable write-offs at Dyna.
DMC posted an adjusted net loss attributable to DMC of $9.9 million, or an adjusted loss per share of $0.50.
Segment performance: Arcadia, DynaEnergetics, and NobelClad
Arcadia (building products) reported fourth-quarter sales of $57 million, down 5% year-over-year and down 8% sequentially. Adjusted EBITDA attributable to DMC was $2.4 million, up slightly from $2.2 million in the prior-year quarter but down from $5.1 million in the third quarter.
Management cited seasonality and continued pressure in construction markets. O’Leary said high interest rates and elevated raw material and labor costs slowed architectural activity and contributed to deferrals of several large projects. He also pointed to a “highly competitive bidding environment” that has pressured pricing, as well as higher aluminum costs. O’Leary said the average price of aluminum, Arcadia’s primary input, was up 55% year-over-year and 12% sequentially, creating additional pressure in a soft market characterized by deferrals and delays.
Walter said Arcadia’s fourth-quarter adjusted EBITDA margin (before non-controlling interest allocation) was 7.1%, up from 6.2% a year earlier but down from 13.8% in the third quarter.
DynaEnergetics (oilfield products) posted fourth-quarter sales of $68.9 million, up 8% year-over-year and flat sequentially. Adjusted EBITDA, including the $7 million in write-offs, was a loss of $2.7 million. Walter said Dyna’s adjusted EBITDA margin was -4%, compared with 8% in the prior-year quarter and 7.1% in the third quarter.
O’Leary said Dyna and its customers have been pressured by volatile and generally declining oil prices, fewer operating frac crews, and intense pricing competition in North American onshore markets. He added that tariffs have materially affected margins, noting Dyna paid more than $3 million in tariffs and related duties in the fourth quarter and more than $10 million since tariffs were imposed in February of the prior year.
In the Q&A session, O’Leary said Dyna’s unit volumes were “as we expected” and “fine,” but that results were hurt primarily by margin compression tied to tariffs and pricing pressure, particularly on perforating guns. He also cited labor costs and the operational “friction” of needing to re-engineer supply chains amid shifting tariff conditions.
NobelClad (composite metals) reported fourth-quarter sales of $17.7 million, down 38% year-over-year and down 15% sequentially. Adjusted EBITDA was $2.1 million, down 64% year-over-year and up 1% sequentially. Walter said NobelClad’s adjusted EBITDA margin was about 12%, compared with 20.6% in the prior-year quarter and about 10% in the third quarter, with the year-over-year decline reflecting lower absorption of fixed manufacturing overhead on reduced sales and a tariff-related slowdown in bookings earlier in the year.
Despite the sales decline, O’Leary said NobelClad’s order backlog ended the quarter at $62.6 million, up 28% year-over-year and up 10% sequentially. He attributed the increase to a record $25 million order in the first quarter of 2025 for an international petrochemical project.
First-quarter outlook: sales down sequentially, EBITDA expected to improve
For the first quarter, DMC guided for sales of $132 million to $138 million and adjusted EBITDA attributable to DMC of $2 million to $4 million. Walter said results would reflect the impact of severe weather across much of the U.S. that affected the businesses during the first half of the quarter.
Management said many of the factors that pressured the fourth quarter and most of 2025 were expected to continue into 2026. Walter said Arcadia would continue to face high interest rates, volatile input prices, and intense price competition, with deferrals and lower activity in core West Coast markets expected to persist at least through the start of the year. He added that Arcadia had difficulty passing through rising aluminum costs in the current environment, and said aluminum costs had risen another 10% quarter-over-quarter as of late in the quarter.
For DynaEnergetics, Walter said the North American unconventional market remains challenged by margin pressure from fewer operating frac crews and higher input prices, which have been inflated largely by tariffs. For NobelClad, he said demand erosion following tariffs and the impact on major orders would result in a slow start to the year, even as the business expects improved performance for the full fiscal year.
Strategic focus: cost discipline and selective growth opportunities
O’Leary said DMC is focused on maximizing operating leverage while preparing for the possibility of additional cost reductions if conditions deteriorate further. During the Q&A, he said management is reviewing costs across operations and product lines, and that if markets were to experience a “step function down,” further actions such as headcount reductions would be considered.
At the same time, O’Leary highlighted growth avenues aligned with existing capabilities:
- DynaEnergetics: exploring opportunities in enhanced geothermal systems (EGS), which O’Leary said uses technology similar to hydraulic fracturing and can leverage similar sales channels; and expanding efforts in emerging international shale markets, including South America’s Vaca Muerta and regions such as Saudi Arabia.
- NobelClad: monitoring potential demand tied to the U.S. Naval Readiness Program. O’Leary said NobelClad is sole source for certain components used in nuclear submarines and could benefit from increased future submarine volumes, though he said any significant impact is more likely in 2027 and beyond.
O’Leary reiterated that evolving tariff policies and interest rates remain key variables affecting results and guidance, and said each business is assessing the implications of the Supreme Court tariff decision while working on mitigation strategies.
About DMC Global (NASDAQ:BOOM)
DMC Global Inc (NASDAQ: BOOM) is a diversified industrial company headquartered in Houston, Texas. It operates through two core business segments—EVI and MECO—that deliver engineered products and services primarily to the mining, oil and gas, and water treatment markets. The company focuses on innovation, precision manufacturing and aftermarket support to help clients improve operational efficiency and safety in challenging environments.
The EVI segment, operating under the DynaEnergetics brand, designs and manufactures explosive perforating systems, well completion tools and precision components for the non-metallic mining and oilfield services industries.
