DMC Global’s Q4 sales drop, despite fiscal-year increase

BROOMFIELD — DMC Global Inc. (Nasdaq: BOOM) recorded record sales in fiscal year 2019, but saw revenues drop in the fourth quarter compared with the same period last year. 

Fourth-quarter sales were $86.4 million, down 14 percent from the third quarter and 4 percent from the last quarter in fiscal year 2018, according to the firm’s recently released earnings report. 

DMC Global attributes the dip to a “sharp decline in North American well completion activity, which negatively impacted demand at DynaEnergetics, DMC’s oilfield products business,” the report said. 

““North American well completion activity began slowing in the third quarter of 2019, and the decline accelerated rapidly in the fourth quarter,” DMC Global CEO Kevin Longe said in a prepared statement. “This downturn reflects a long-overdue shift in the industry toward capital discipline, free cash flow generation, strengthening of balance sheets, and ultimately, improved returns for investors. While this dynamic has slowed near-term drilling and completion activity, it is necessary for strengthening the health of our industry over the longer term.”

Despite the tough quarter, DMC Global posted full-year revenues of $397.6 million, a company record and a 22 percent increase over 2018.

Full-year 2019 net income was $34 million, or $2.28 per diluted share, while full-year adjusted net income was $55.6 million, or $3.75 per diluted share. 

“Our employees executed extremely well during 2019, and their efforts enabled DMC to deliver record consolidated sales and earnings, strong operating cash flow, and increased shareholder returns that included a significant increase in our annual dividend,” Longe said.

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