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DMCGlobal.com
DMC is a diversified technology company.
We are focused on growing our company by
investing in people, products and businesses
that serve niche global markets. Today, our
portfolio consists of NobelClad and
DynaEnergetics, which address the industrial
processing, transportation and energy
markets through global manufacturing, sales
and distribution networks.
2017 Investor Presentation 2
OUR STORY
DMCGlobal.com
SELECT DATA
BOOM
$5.91 - $17.19
35,903
$205 Million
14.5 Million
13.9 Million
December 31
$0.02
$158.6 Million
$9.1 Million
2017 Investor Presentation 3
Symbol (Nasdaq GS):
52-week price range:
Average daily volume:
Market capitalization:
Shares outstanding:
Approximate float:
Fiscal year:
Quarterly dividend:
Revenue (ttm):
Adjusted EBITDA* (ttm)
BOOM 1-Year Price & Volume
*Non-GAAP financial measure
DMCGlobal.com
REVENUE BY BUSINESS
2017 Investor Presentation
4
2015
(54%)
$76.9
(46%)
NobelClad DynaEnergetics
$ in millions
$90.0
2016
(58%)
$67.3
(42%)
$91.3
4
DMCGlobal.com
DMC EXECUTIVE LEADERSHIP
2017 Investor Presentation 5
KEVIN LONGE
• Named President, CEO and Director in March 2013
• Joined DMC as Chief Operating Officer in July 2012
• Former VP and and GM of Sonoco's $600 million
Protective Packaging division • Former President of Sonoco's ThermoSafe Brands
• Oversaw global sales, marketing, engineering and R&D
for the life sciences, medical, food and industrial
durables markets
• Oversaw eight manufacturing centers in the U.S., Europe
and Asia
• Former President of three operating divisions at Lydall,
Inc. (NYSE-LDL)
President & CEO MICHAEL KUTA
• Joined DMC as Chief Financial Officer in March 2014
• Former Corporate Controller at Berkshire Hathaway’s
Lubrizol Corporation, a global,
$6 billion specialty chemicals company
• Was responsible for building and managing financial
operations for Lubrizol’s disbursed global operations,
including accounting, consolidation and financial
reporting functions, and oversight of internal controls
• Former financial positions of increasing responsibility at
Lincoln Electric and Eaton Corporation
Chief Financial Officer MICHELLE SHEPSTON
• Joined DMC in 2016 after 16 years with Denver-based
Davis Graham & Stubbs LLP
• Was a partner with DGS, and practiced with the
Corporate Finance and Acquisitions Group
• Expertise in securities law, mergers & acquisitions,
cross border debt & equity transactions, contract
negotiation and execution
• Industry expertise includes energy and natural
resources
Chief Legal Officer
DMCGlobal.com
LEADERSHIP TEAM
2017 Investor Presentation 6
IAN GRIEVES President, DynaEnergetics
• Joined DynaEnergetics in 2013
• 20 years of diverse operational, engineering, finance
and management experience with international
industrial businesses
• Previously Senior Vice President of Lydall, Inc.’s
Performance Materials division
JOHN SCHEATZLE President, NobelClad
• Joined DMC in 2016 after 19 years with advanced
materials manufacturer Materion
• As Vice President and General Manager of
Materion’s Performance Alloys division, was
responsible for multiple North American production
facilities and international sales and distribution
centers
• Former General Manager of Materion’s Ceramic
Products division
BIN ZHANG Managing Director, China, DMC
• Responsible for Chinese business development and
market positioning for NobelClad and
DynaEnergetics
• Native of Beijing with 20 years of senior level
business experience
• Established an Asia Pacific sales and marketing
presence for a Sheldahl, Inc., a specialized
manufacturer based in Minnesota
DMCGlobal.com
DMC empowers its people and organizations
by institutionalizing entrepreneurship and
celebrating technical ingenuity. Our growth
is fueled by energized, relevant and nimbly
executed solutions that make a real
difference to our customers. DMC’s
responsive organizations are focused on
serving the world’s growth markets, giving
investors high returns throughout varying
economic cycles.
2017 Investor Presentation 7
OUR CULTURE
DMCGlobal.com
CHAPTER & PAGE TITLE HERE
2017 Investor Presentation 8
REPRESENTATIVE: NAME & POSITION HERE
DMCGlobal.com
DYNAENERGETICS OVERVIEW
2017 Investor Presentation 9
A top-tier provider of
compatibility tested perforating
systems.
Acquired by DMC in 2007 as new platform business.
Unmatched global reach serving a worldwide network of oil and gas service providers.
Reputation for product safety, technical innovation and system reliability under extreme environmental conditions.
Perforating and well-completion technologies drive improved safety, productivity and lower operating costs for customers.
DMCGlobal.com 10 2017 Investor Presentation
DYNAENERGETICS SALES BY GEOGRAPHY
2016 Sales: $67.3 Million
United States / 61%
Canada / 13%
India / 7%
Russia / 5%
Egypt / 3%
Ukraine / 1%
Romania / 1%
Rest of World / 9%
DMCGlobal.com
PERFORATING BASICS
2017 Investor Presentation 11
1. Once a wellbore is drilled and
cement and steel casing are in
place, a perforating gun
is deployed into the well.
2. The perforating gun is
fired, sending plasma jets through
the casing and into the
surrounding formation creating
“perforation tunnels”.
3. Oil or gas flows through the
perforation tunnels and
into the well.
DMCGlobal.com 12 2017 Investor Presentation
DYNAENERGETICS MARKET INDICATORS: RIG COUNT BY GLOBAL REGION
2/3/2017
1/31/2017
1/31/2017
2/3/2017
1/31/2017
1/31/2017
1/31/2017
1/31/2017
-
400
800
1,200
1,600
2,000
2/26/2014
5/26/2014
8/26/2014
11/26/2014
2/26/2015
5/26/2015
8/26/2015
11/26/2015
2/26/2016
5/26/2016
8/26/2016
11/26/2016
US
40
80
120
160
200
2/26/2014
5/26/2014
8/26/2014
11/26/2014
2/26/2015
5/26/2015
8/26/2015
11/26/2015
2/26/2016
5/26/2016
8/26/2016
11/26/2016
Europe Afr ica
160
180
200
220
240
260
280
300
2/26/2014
5/26/2014
8/26/2014
11/26/2014
2/26/2015
5/26/2015
8/26/2015
11/26/2015
2/26/2016
5/26/2016
8/26/2016
11/26/2016
Asia Pacific
-
100
200
300
400
500
600
700
800
2/26/2014
5/26/2014
8/26/2014
11/26/2014
2/26/2015
5/26/2015
8/26/2015
11/26/2015
2/26/2016
5/26/2016
8/26/2016
11/26/2016
Canada
200
250
300
350
400
450
500
2/26/2014
5/26/2014
8/26/2014
11/26/2014
2/26/2015
5/26/2015
8/26/2015
11/26/2015
2/26/2016
5/26/2016
8/26/2016
11/26/2016
Middle East
-
100
200
300
400
500
2/26/2014
5/26/2014
8/26/2014
11/26/2014
2/26/2015
5/26/2015
8/26/2015
11/26/2015
2/26/2016
5/26/2016
8/26/2016
11/26/2016
Lat in America
DMCGlobal.com 13 2017 Investor Presentation
DYNAENERGETICS MARKET INDICATORS: U.S. RIG COUNT BY TYPE
2/3/2017
2/3/2017
2/3/2017
2/3/2017
-
200
400
600
800
1,000
1,200
1,400
1,600
2/2
6/2
01
4
4/2
6/2
01
4
6/2
6/2
01
4
8/2
6/2
01
4
10
/26
/20
14
12
/26
/20
14
2/2
6/2
01
5
4/2
6/2
01
5
6/2
6/2
01
5
8/2
6/2
01
5
10
/26
/20
15
12
/26
/20
15
2/2
6/2
01
6
4/2
6/2
01
6
6/2
6/2
01
6
8/2
6/2
01
6
10
/26
/20
16
12
/26
/20
16
Horizontal Directional Vertical
DMCGlobal.com
DYNAENERGETICS MARKET INDICATORS: U.S. LAND FRAC ACTIVITY
2017 Investor Presentation 14
DMCGlobal.com 15 2017 Investor Presentation
DYNAENERGETICS PERFORMANCE
$ in millions
83
.7
10
5.5
76
.9 6
7.3
2013 2014 2015 2016
Sales
11
.9
22
.4
8.1
2.5
2013 2014 2015 2016
Adjusted EBITDA*
*Non-GAAP financial measure
1
1
1
DMCGlobal.com
TOTAL WELLS FRAC’ED AND FORECAST
2017 Investor Presentation 16
•
•
•
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
14Q
2
14Q
3
14Q
4
15Q
1
15Q
2
15Q
3
15Q
4
16Q
1
16Q
2
16Q
3
16Q
4
17Q
1
17Q
2
17Q
3
17Q
4
18Q
1
18Q
2
18Q
3
18Q
4
19Q
1
19Q
2
19Q
3
19Q
4
20Q
1
20Q
2
20Q
3
20Q
4
21Q
1
21Q
2
21Q
3
21Q
4
22Q
1
Total Horizontal Vertical/Directional
Forecast
Values Percent Change
2016 2017 2018 2019 2020 2021 2022 2017∆ 2018∆ 2019∆ 2020∆ 2021∆ 2022∆
Horizontal 8,048 10,292 11,669 13,173 14,423 15,306 16,665 27.88% 13.38% 12.89% 9.49% 6.12% 8.88%
Vertical/Directional 2,821 4,402 5,743 7,111 7,712 8,002 7,721 56.04% 30.46% 23.82% 8.45% 3.76% -3.51%
Total 10,869 14,694 17,412 20,284 22,135 23,308 24,386 35.19% 18.50% 16.49% 9.13% 5.30% 4.63%
DMCGlobal.com
TOTAL FRAC STAGES AND FORECAST
2017 Investor Presentation 17
•
•
•
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
14Q
2
14Q
3
14Q
4
15Q
1
15Q
2
15Q
3
15Q
4
16Q
1
16Q
2
16Q
3
16Q
4
17Q
1
17Q
2
17Q
3
17Q
4
18Q
1
18Q
2
18Q
3
18Q
4
19Q
1
19Q
2
19Q
3
19Q
4
20Q
1
20Q
2
20Q
3
20Q
4
21Q
1
21Q
2
21Q
3
21Q
4
22Q
1
Total Horizontal Vertical/Directional
Forecast
Values Percent Change
2016 2017 2018 2019 2020 2021 2022 2017∆ 2018∆ 2019∆ 2020∆ 2021∆ 2022∆
Horizontal 206,306 292,742 343,440 389,355 426,412 452,314 491,090 41.90% 17.32% 13.37% 9.52% 6.07% 8.57%
Vertical/Directional 10,243 17,203 22,398 27,741 29,926 30,880 29,300 -19.79% -54.93% -57.26% 67.95% 30.20% 23.85%
Total 216,549 309,945 365,838 417,096 456,338 483,194 520,390 43.13% 18.03% 14.01% 9.41% 5.89% 7.70%
DMCGlobal.com 18
PRIMARY COMPONENTS OF A PERFORATING SYSTEM
2017 Investor Presentation
DynaEnergetics is the only company manufacturing all components of a perforating system
01 SHAPED CHARGES 02 DETONATORS 03 DETONATING CORD
04 GUN CARRIERS & “SUBS” 05 CONTROL PANELS
DMCGlobal.com 19
DynaStage™ Perforating System
• Factory assembled, performance assured
• Incorporates DynaSelect intrinsically safe
detonating technology
• No wiring connections… reduces set-up time to
seconds
• Removes the potential for electrical connection
errors
• Eliminates gun loading steps
• Fully disposable and maintenance free
DynaSelect™ Detonators
• Integrated, intrinsically safe & selective
technologies
• Enables concurrent perforating and fracturing
• Reduces the risk of accidents
• Time and cost savings from sequential gun
initiation
• Improved set-up times and reliability from
fewer electrical wiring connections
01 02
DYNAENERGETICS PRODUCT INNOVATIONS
2017 Investor Presentation
DynaSlot™ Well Abandonment System
• Fast, cost-effective alternative to traditional plug
and abandonment, and “cement squeeze”
techniques
• Helical pattern of overlapping horizontal slots
provides 360-degree cement coverage behind
tubing or casing
03
DMCGlobal.com
3-3/8”
3-1/8”
2-3/4”
DYNASTAGE™ GUN SYSTEM
2017 Investor Presentation 20
*patents pending Top Fire DynaSelect
Detonator* Multitronic V Firing Panel
Three Stage Gun String with Bridge Plug
DynaStage Gun Module*
Ecoil Tandem Sub Adapter
Quick Change
GO-Style Firing Head
Top Fire DynaSelect Detonator
DMCGlobal.com
DYNASELECT™ AND DYNASTAGE™ PROVIDE BUSINESS MODEL ADVANTAGE
2017 Investor Presentation
CURRENT INDUSTRY MODEL DYNAENERGETICS MODEL: PRODUCT BENEFITS + BUSINESS MODEL ADVANTAGE
DynaStage Advantages • Factory assembled and delivered to customer in the field • System is armed upon installation of DynaStage switch detonator, eliminating field wiring • Surface tester ensures system is fully functional before down-hole deployment
Benefits: • No misfires, improved reliability • Reduced transportation costs and field labor • No need for gun assembly or storage facilities • Simplified supply chain • Reduced working capital, improved profitability for customers
Current Process Customer mixes & matches perforating components from multiple suppliers, then assembles and wires gun in the field
Challenges: • Assembly errors lead to misfires • Quality & safety • Operating cost • Complexity of supply chain
21
DMCGlobal.com
DYNAENERGETICS MOBILE MARKETING TRAILER
2017 Investor Presentation 22
DMCGlobal.com
DYNAENERGETICS GROWTH INITIATIVES
2017 Investor Presentation 23
• Investing in research and
development of next-generation
technologies
• Launching new products that
improve customer operating
efficiencies and drive down costs
• Forging strategic partnerships to
enter new markets
• Innovating comprehensive
solutions that meet anticipated
market demand
DMCGlobal.com
SELECT END USERS
24
These major energy service companies are both competitors
and customers. When distribution limitations inhibit these
companies’ ability to supply perforating equipment to certain international
locations, they often turn to DynaEnergetics.
2017 Investor Presentation
DMCGlobal.com
DYNAENERGETICS: PROACTIVE RESPONSE TO DOWN CYCLE
2017 Investor Presentation 25
Oil price decline is shifting the
focus of the exploration,
production and service
industries.
Operators and service providers seeking to reduce costs,
improve operational efficiencies, enhance
competitiveness.
Ideal time to introduce next-generation products
(DynaSelect™, DynaStage™, DynaSlot™) that deliver
step change in efficiency, performance and safety.
Favorable environment to shift industry business model:
Sell feature-rich perforating systems versus individual
components.
Capitalize on anticipated growth of well re-completion
and workover projects.
Manage internal costs.
DMCGlobal.com 2017 Investor Presentation 26
DMCGlobal.com
NOBELCLAD OVERVIEW
27
NobelClad is the worldwide
leader in explosion welded plate
production.
Largest global supplier of explosion clad plates.
Serving a diversified roster of industrial and
infrastructure end markets. Working to drive
engineering specifications for clad.
Profiting from global industrial infrastructure
investments.
Strong free cash flow.
2017 Investor Presentation
DMCGlobal.com
11
8.4
97
.1 90
.0
91
.3
2013 2014 2015 2016
Sales
NOBELCLAD’S PERFORMANCE
2017 Investor Presentation 28
$ in millions
23
.2
15
.4
10
.7
12
.9
2013 2014 2015 2016
Adjusted EBITDA*
*Non-GAAP financial measure
2016 Sales: $91.3 Million
United States / 42%
Canada / 8%
United Arab Emirates / 7%
China / 7%
Germany / 6%
France / 4%
Australia / 3%
Italy / 3%
Rest of World / 20%
2017 Investor Presentation 29
NOBELCLAD SALES BY GEOGRAPHY
DMCGlobal.com
EXPLOSION WELDING PROCESS
30 2017 Investor Presentation
DMCGlobal.com
DEMAND DRIVERS FOR EXPLOSION WELDING
31
03
Design Flexibility
02
Corrosive Environments
01
Global Infrastructure Investment
2017 Investor Presentation
DMCGlobal.com
NOBELCLAD’S COMPETITIVE ADVANTAGE
2017 Investor Presentation 32
• Global network of specialty metals
providers
• Permits and shooting sites
in U.S., France, and Germany
• Mastery of explosion-welding
process for large-scale production
• Strong working relationships with
end-market customers
NobelClad’s dominant position in the
explosion welding industry is
protected by significant barriers to
entry.
Titanium clad pressure vessels – image courtesy of Coek Engineering.
DMCGlobal.com
NOBELCLAD GROWTH INITIATIVES
2017 Investor Presentation 33
• Expanding market share in Asia
• R&D focused on new clad plate
applications
• Applying process expertise to new
market development
• Strengthening global sales force
with addition of end-market
experts
• Expanding production capabilities
with new European manufacturing
facility
Separating equipment – A natural gas production facility where NobelClad’s explosion welded
plates were used in the fabrication of specialized pipes.
DMCGlobal.com
PRIMARY END MARKETS SERVED
2017 Investor Presentation 34
• Chemical
• Oil and Gas
• Metals and Mining
• Marine
• Power Generation
• Alternative Energy
• Industrial Refrigeration
• Transportation
• Defense and Protection
DMCGlobal.com
SELECT END USERS
35
Chemicals Refining Mining Engineering
2017 Investor Presentation
NobelClad provides value to its industrial and infrastructure customers by collaborating at every stage of development. During design phases, NobelClad is a key resource for process architects and engineers who often write NobelClad plates into their manufacturing specifications.
DMCGlobal.com
FINANCIAL PERFORMANCE REVIEW
2017 Investor Presentation 36
($MM except per share amounts) 2013 2014 2015 2016
Sales % growth
$202.1 5%
$202.6 0%
$166.9 -18%
$158.6 -5%
Gross Profit % margin
$58.1 29%
$61.4 30%
$35.6 21%
$38.7 25%
Operating Profit (Loss)* % margin
$12.3 6%
$14.7 7%
($0.0) 0%
($5.2) -3%
Income (Loss) from Continuing Operations (after tax)*
$6.1 $7.9 ($8.0) ($8.2)
Diluted EPS from Continuing Operations* $0.44 $0.57 ($0.57) ($0.58)
Adjusted EBITDA* % margin
$28.0 14%
$31.5 16%
$13.1 7%
$9.0 6%
*Non-GAAP financial measures
1
DMCGlobal.com
BALANCE SHEET HIGHLIGHTS
2017 Investor Presentation 37
Assets ($MM) December 31, 2015 December 31, 2016
Cash, cash equivalents $6.3 $6.4
Accounts receivables, net $35.8 $33.0
Inventory $35.4 $28.8
Total current assets $86.5 $73.4
Total assets $182.2 $162.6
Liabilities ($MM)
Total current liabilities $32.9 $30.7
Lines of credit $26.8 $15.7
Long-term debt $0.0 $0.0
Total liabilities $63.8 $50.1
Total stockholders’ equity $118.4 $112.4
Total liabilities and stockholders’ equity $182.2 $162.6
DMCGlobal.com
DMC’S PERFORMANCE TENETS
2017 Investor Presentation 38
Through share ownership, DMC
management has closely
aligned its interest with
independent shareholders, and
all management decisions are
made to maximize shareholder
value.
DMC has adopted three tenets to guide superior
share price performance:
1. Maximize free cash flow through financial
discipline
2. Maximize return on invested capital by achieving
operational excellence and making discerning
investment decisions
3. Invest in new technology, product and market
development to drive sustained growth and
increased profitability
DMCGlobal.com
CONTACT INFORMATION
2017 Investor Presentation 39
DMC
5405 Spine Road
Boulder, Colorado 80301, USA
T 800-821-2666
Geoff High
Vice President of Investor Relations
E ghigh@dmcglobal.com
T 303-514-0656
Contact Primary Contact
DMCGlobal.com
APPENDIX: USE OF NON-GAAP FINANCIAL MEASURES
3/10/2017 Presentation Title 40
APPENDIX: USE OF NON-GAAP FINANCIAL MEASURES
DMCGlobal.com 40 2017 Investor Presentation
Adjusted EBITDA and diluted EPS are non-GAAP (generally accepted accounting principles) financial measures used by management to measure operating performance. Non-GAAP results are presented only as a supplement to the financial statements based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader's understanding of DMC’s financial performance, but no non-GAAP measure should be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures are provided within the schedules attached to this release. EBITDA is defined as net income plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation, restructuring and impairment charges and, when appropriate, other items that management does not utilize in assessing DMC’s operating performance (as further described in the attached financial schedules). None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure.
Management uses these non-GAAP measures in its operational and financial decision-making, believing that it is useful to eliminate certain items in order to focus on what it deems to be a more reliable indicator of ongoing operating performance.
As a result, internal management reports used during monthly operating reviews feature the adjusted EBITDA. In addition, certain management incentive awards were based, in part, on the amount of adjusted EBITDA achieved during the year. Management also believes that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures. EBITDA and adjusted EBITDA are also used by research analysts, investment bankers and lenders to assess operating performance. For example, a measure similar to EBITDA is required by the lenders under DMC’s credit facility. Because not all companies use identical calculations, DMC’s presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the company’s performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures. For example, a company with greater GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, eliminating the effects of interest income and expense moderates the impact of a company's capital structure on its performance.
All of the items included in the reconciliation from net income to EBITDA and adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles and stock-based compensation)
or (ii) items that management does not consider to be useful in assessing DMC’s operating performance (e.g., income taxes, restructuring and impairment charges and gain on sale of assets). In the case of the non-cash items, management believes that investors can better assess the company’s operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect DMC's ability to generate free cash flow or invest in its business. For example, by adjusting for depreciation and amortization in computing EBITDA, users can compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, management believes that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance. We have also presented certain financial measures excluding certain one-time, non-recurring “special items,” including our accrued anti-dumping duties, inventory reserve adjustment, the non-cash goodwill impairment charge and restructuring charges. These are non-GAAP financial measures when the special items are excluded. We believe these are important supplemental measures because they eliminate one-time, non-recurring items that have less bearing on our operating performance and so highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures. We have quantified those special items earlier in this release, or immediately following, the financial measures that excluded the special items, to allow readers to measure their impact.
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