Financial Analysis

COMMITMENTS AND CONTINGENCIES Contingent Liabilities The Company records an accrual for contingent liabilities when a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. Legal Proceedings In the ordinary course of its business, the Company is involved in a number of lawsuits and claims, both actual and potential. In addition to the matters discussed below, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, safety and health, commercial, tax, product liability, intellectual property infringement and employment matters, and other actions and claims arising out of the normal course of business. Although it is difficult to accurately predict the outcome of any such proceedings, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company. Stockholder Litigation On December 6, 2024, Samuel Garson, individually and on behalf of a putative class, filed a securities class action lawsuit in the United States District Court for the District …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

EMPLOYEE BENEFIT PLANS 401(k) Plan We offer a contributory 401(k) plan to our U.S. employees. We make matching contributions equal to 100% of each employees contribution up to 3% of qualified compensation and 50% of the next 2% of qualified compensation contributed by each employee. Total DMC contributions were $2,585, $2,694, and $2,590 for the years ended December 31, 2025, 2024, and 2023, respectively. Foreign Subsidiary Defined Benefit and Defined Contribution Plans We have defined benefit pension plans at certain foreign subsidiaries for which we have recorded an unfunded pension obligation of $1,423 and $1,415 as of December 31, 2025, and 2024, respectively, which is included in Other long-term liabilities in the Consolidated Balance Sheets. Annual adjustments to the obligation are based upon actuarial calculations and are recorded within General and administrative expenses in the Consolidated Statements of Operations. We recognized income of $166 for the year ended December 31, 2025, and expense of $11 and $91 for the years ended December 31, 2024, and 2023, respectively. In 2020, a new defined contribution pension plan went into effect for employees at certain foreign subsidiaries, which replaced the defined benefit plan described above. Under the new plan, pension benefits will be financed both through contributions by the Company and employees. The Company contributes between 1.5% and 4.5% of an employees salary annually. During the years ended December 31, 2025, 20 …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

DEBT Outstanding borrowings consisted of the following at December 31: 2025 2024 Syndicated credit agreement: U.S. Dollar revolving loan $ 6,375 $ 24,375 Term loan 45,625 48,125 European line of credit Outstanding borrowings 52,000 72,500 Less: debt issuance costs (1,356) (1,682) Total debt 50,644 70,818 Less: current portion of long-term debt (3,438) (2,500) Long-term debt $ 47,206 $ 68,318 Syndicated Credit Agreement On February 6, 2024 , the Company and certain domestic subsidiaries entered into an amendment (the First Amendment) to its existing credit agreement with a syndicate of banks, led by KeyBank National Association (the credit facility). The First Amendment provided for certain changes to the credit facility and increased the maximum commitment amount from $200,000 to $300,000. The credit facility originally allowed for revolving loans of up to $200,000, a $50,000 term loan facility, and a $50,000 delayed draw term loan (DDTL) facility. On February 6, 2026, the ability of the Company to access the $50,000 DDTL facility expired per the terms of the First Amendment. The $50,000 term loan facility is payable in installments of $625 per quarter through March 31, 2026. Quarterly term loan payments increase to $938 on June 30, 2026, through March 31, 2028, and increase to $1,250 from June 30, 2028 , through December 31, 2028. A balloon payment for the outstanding term loan balance is due upon the credit facility maturity date of February 6, 2029. The credit facility ret …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The domestic and foreign components of (loss) income before income taxes for our operations consist of the following for the years ended December 31: 2025 2024 2023 Domestic $ (18,988) $ (161,340) $ 16,181 Foreign 11,309 20,350 33,698 (Loss) income before income taxes $ (7,679) $ (140,990) $ 49,879 The components of the provision for income taxes consist of the following for the years ended December 31: 2025 2024 2023 Current Federal $ (421) $ 484 $ 3,522 Current State 326 571 733 Current Foreign 3,930 5,696 9,895 Current income tax expense 3,835 6,751 14,150 Deferred Federal (62) 3,230 87 Deferred State 278 877 587 Deferred Foreign 15 112 296 Deferred income tax expense 231 4,219 970 Income tax provision $ 4,066 $ 10,970 $ 15,120 Incomes taxes paid, net of refunds, exceeds 5 percent of total income taxes paid, net of refunds, in the following jurisdictions for the year ended December 31: 2025 Federal $ 459 State 228 Foreign Germany 9,480 All other foreign 368 Total income taxes paid, net of refunds $ 10,535 Our deferred tax assets and liabilities consist of the following at December 31: 2025 2024 Deferred tax assets: Net operating loss carryforward $ 10,693 $ 5,589 Inventory differences 1,001 1,127 Equity compensation 765 1,231 Investment in joint venture 19,558 20,254 Restructuring 69 206 Purchased intangible assets and goodwill 137 243 Accrued employee compensation and benefits 2,831 3,881 Lease liabilities 2,772 3,204 Interest expense 2,386 2,249 Research and …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company leases real properties for use in manufacturing and as administrative and sales offices, and leases automobiles and office equipment. The Company determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Company is the lessee, leases are classified as either finance or operating. Right-of-use (ROU) assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any. If a lease does not provide a discount rate and the implicit rate cannot be readily determined, an incremental borrowing rate is used to determine the present value of future lease payments. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term within the Consolidated Statements of Operations. Lease and non-lease components within the Companys lease agreements are accounted for together. Variable lease payments are recognized in the period in which the obligation is incurred. Nearly all of the Companys leasing arrangements are classified as operating leases. ROU asset and lease liability balances were as follows for the periods presented: December 31, 2025 December 31, 2024 ROU asset $ 36,018 $ 42,164 Current lease liability 8,337 8,297 Long-term lease liability 31,805 37,150 Total lease liability $ 40,142 $ 45,447 The ROU asset is reported in Other assets while the current lease liability is reported in Other current liabilities , and the lon …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures (ASU 2023-09), which amends income tax disclosure requirements for the effective tax rate reconciliation to include incremental income tax information and expanded disclosures of income taxes paid. We adopted ASU 2023-09 for the year ended December 31, 2025 on a prospective basis. Refer to Note 10 Income Taxes for additional information. In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). ASU 2024-03 requires public business entities to disclose more detailed information about the types of expense in commonly presented expense captions to provide investors with more transparent and detailed expense information. The guidance is effective for fiscal years beginning after December 15, 2026 on a prospective basis. Early adoption and retrospective application of the amendments are permitted. The Company is within the scope of this ASU and expects to adopt ASU 2024-03 on January 1, 2027, with adoption resulting in new disclosures as prescribed by the guidance. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

BUSINESS SEGMENTS Our business is currently organized into three segments: Arcadia Products, DynaEnergetics, and NobelClad. In December 2021, DMC acquired a 60% controlling interest in Arcadia Products. Arcadia Products designs, engineers, fabricates, and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions to the commercial construction market. Additionally, Arcadia Products supplies customized windows and doors to the high-end residential construction market. DynaEnergetics designs, manufactures, markets and sells perforating systems and associated hardware for the global oil and gas industry. NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and LNG processing equipment. Our reportable segments are separately managed, strategic business units that offer different products. Each segments products are marketed to different customer types and require different manufacturing processes and technologies, and each segment has separate financial information available. The Chief Operating Decision Maker (CODM) uses segment operating income or loss to allocate resources (including employees, property, and financial or capital resources) for each segment in the budget and forecasting process and to assess ongoing performance on a monthly basis. The CODM does not review total …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The Companys consolidated financial statements (Consolidated Financial Statements) include the accounts of DMC and its controlled subsidiaries. All intercompany accounts, profits, and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Business Combination The results of a business acquired in a business combination are included in the Companys financial statements from the date of acquisition. Acquisition-related transaction costs are expensed in the period in which the costs are incurred. The Company allocates purchase price to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to make significant judgments and estimates, including the selection of valuation methodol …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS EQUITY AND EMPLOYEE STOCK PLANS Employee stock plans Our stock-based compensation expense results from RSAs, restricted stock units (RSUs), and performance share units (PSUs). The following table sets forth the total stock-based compensation expense included in the Consolidated Statements of Operations for the years ended December 31: 2025 2024 2023 Cost of products sold $ 279 $ 322 $ 430 General and administrative expenses 4,950 5,413 8,583 Selling and distribution expenses 519 795 1,102 Strategic review and related expenses 36 372 Restructuring expenses, net and asset impairments 155 Stock-based compensation 5,784 6,902 10,270 Income tax benefit (1,218) (1,380) (3,104) Stock-based compensation, net of income taxes $ 4,566 $ 5,522 $ 7,166 Earnings per share impact Basic $ 0.23 $ 0.28 $ 0.37 Diluted $ 0.23 $ 0.28 $ 0.37 On May 14, 2025, our stockholders approved the 2025 Omnibus Incentive Plan (2025 Plan). The 2025 Plan provides for the granting of various types of equity-based incentives, including stock options, RSAs, RSUs, stock appreciation rights, performance shares, performance units, other stock-based awards, and cash-based awards. Our stockholders approved a total of 2,414,278 shares available for grant under the 2025 Plan, less 1,331,911 outstanding shares previously granted under the 2016 Omnibus Incentive Plan (2016 Plan) as of the 2016 Plans expiration on May 14, 2025. As of December 31, 2025, there were 557,942 shares available for future grant. In d …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

COMMITMENTS AND CONTINGENCIES Contingent Liabilities The Company records an accrual for contingent liabilities when a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. Legal Proceedings In the ordinary course of its business, the Company is involved in a number of lawsuits and claims, both actual and potential. In addition to the matters discussed below, various other lawsuits, claims, and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, safety and health, commercial, tax, product liability, intellectual property infringement and employment matters, and other actions and claims arising out of the normal course of business. Although it is difficult to accurately predict the outcome of any such proceedings, based on facts currently available, management believes that the disposition of these other matters that are pending or asserted will not have a material adverse effect, individually or in the aggregate, on the financial position of the Company. Stockholder Litigation On December 6, 2024, Samuel Garson, individually and on behalf of a putative class, filed a securities class action lawsuit in the United States District Court for the District …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT Outstanding borrowings consisted of the following at: June 30, 2026 December 31, 2025 Syndicated credit agreement: U.S. Dollar revolving loan $ 16,138 $ 6,375 Term loan 44,063 45,625 European line of credit Outstanding borrowings 60,201 52,000 Less: debt issuance costs (1,137) (1,356) Total debt 59,064 50,644 Less: current portion of long-term debt (3,750) (3,438) Long-term debt $ 55,314 $ 47,206 Syndicated Credit Agreement On February 6, 2024 , the Company and certain domestic subsidiaries entered into an amendment (the First Amendment) to its existing credit agreement with a syndicate of banks, led by KeyBank National Association (the credit facility). The First Amendment provided for certain changes to the credit facility and increased the maximum commitment amount from $200,000 to $300,000. The credit facility originally allowed for revolving loans of up to $200,000 , a $50,000 term loan facility, and a $50,000 delayed draw term loan (DDTL) facility. On February 6, 2026, the ability of the Company to access the $50,000 DDTL facility expired per the terms of the First Amendment. The $50,000 term loan facility is payable in installments of $938 per quarter through March 31, 2028. Quarterly term loan payments increase to $1,250 from June 30, 2028, through December 31, 2028. A balloon payment for the outstanding term loan balance is due upon the credit facility maturity date of February 6, 2029. The credit facility retains a $100,000 accordion feature to increase the com …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

INCOME TAXES The effective tax rate for each of the periods reported differs from the U.S. statutory rate primarily due to variation in contribution to consolidated pre-tax income (loss) from each jurisdiction for the respective periods, differences between the U.S. and foreign tax rates (which range from 20% to 32%), permanent differences between book and taxable income, and income or loss attributable to the redeemable noncontrolling interest holder. Arcadia Products is treated as a partnership for U.S. tax purposes. With the exception of certain state taxes, income or loss flows through to the shareholders and is taxed at the shareholder level. Tax impacts related to income or loss from Arcadia Products that are included in consolidated pretax results but are attributable to the redeemable noncontrolling interest holder are not included in the consolidated income tax provision. We assess available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. Additionally, a three-year cumulative loss at a consolidated financial statement level may be viewed as negative evidence impacting a jurisdiction that by itself is not in a three-year cumulative loss position. As of June 30, 2026, we were in a three-year cumulative loss position at the consolidated financial statement level, driven by historical losses in the U.S. primarily related to the impairment of Arcadia Products goodwill in 2024. Accordingl …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company leases real properties for use in manufacturing and as administrative and sales offices, and leases automobiles and office equipment. Nearly all of the Companys leasing arrangements are classified as operating leases. Right-of-use (ROU) asset and lease liability balances were as follows for the periods presented: June 30, 2026 December 31, 2025 ROU asset $ 41,108 $ 36,018 Current lease liability $ 8,485 $ 8,337 Long-term lease liability 36,655 31,805 Total lease liability $ 45,140 $ 40,142 The ROU asset is reported in Other assets while the current lease liability is reported in Other current liabilities and the long-term lease liability is reported in Other long-term liabilities in the Companys Condensed Consolidated Balance Sheets. Cash paid for operating lease liabilities is recorded as operating cash outflows in the Companys Condensed Consolidated Statements of Cash Flows. …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03). ASU 2024-03 requires public business entities to disclose more detailed information about the types of expense in commonly presented expense captions to provide investors with more transparent and detailed expense information. The guidance is effective for fiscal years beginning after December 15, 2026 on a prospective basis. Early adoption and retrospective application of the amendments are permitted. The Company is within the scope of this ASU and expects to adopt ASU 2024-03 on January 1, 2027. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

BUSINESS SEGMENTS Our business is organized into three segments: Arcadia Products, DynaEnergetics and NobelClad. In December 2021, DMC acquired a 60% controlling interest in Arcadia Products. Arcadia Products designs, engineers, fabricates, and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions to the commercial construction market. Additionally, Arcadia Products supplies customized windows and doors to the high-end residential construction market. DynaEnergetics designs, manufactures, markets, and sells perforating systems and associated hardware for the global oil and gas industry. NobelClad produces explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas (LNG) processing equipment. Our reportable segments are separately managed, strategic business units that offer different products. Each segments products are marketed to different customer types and require different manufacturing processes and technologies, and each segment has separate financial information available. The Chief Operating Decision Maker (CODM) uses segment operating income or loss to allocate resources (including employees, property, and financial or capital resources) for each segment in the budget and forecasting process and to assess ongoing performance on a monthly basis. The CODM does no …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts of DMC Global Inc. (DMC, we, us, our, or the Company) and its controlled subsidiaries. All intercompany accounts, profits, and transactions have been eliminated in consolidation. Accounts Receivable The Company measures expected credit losses for its accounts receivable using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company has disaggregated pools of accounts receivable balances by business, geography and/or customer risk profile and has used history and other experience to establish an allowance for credit losses at the time the receivable is recognized. To measure expected credit losses, we have elected to pool trade receivables by segment and analyze each segments accounts receivable balances as separate populations. Within each segment, receivables exhibit similar risk characteristics. During the three and six months ended June 30, 2026, our expected loss rate reflects uncertainties in market conditions present in our businesses, including supply chain disruptions, continued volatility in oil and gas markets, elevated interest rates, as well as global geopolitical and economic instability. In addition, we reviewed receivables outstanding, including aged balances, and in circumstances where we are aware of a specific customers inabi …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

STOCKHOLDERS PROTECTION RIGHTS AGREEMENT On June 5, 2024, the Board adopted the Stockholder Protection Rights Agreement (the Rights Agreement) and declared a dividend of one right (Right) for each share of the Companys common stock outstanding at the close of business on June 17, 2024. One Right will also be issued together with each share of common stock issued by the Company after that date, but before the Separation Time (as defined in the Rights Agreement). Each Right initially represents the right to purchase one one-thousandth (0.001) of a share of Series B Participating Preferred Stock for $75.00, subject to adjustment and upon such terms and subject to the conditions set forth in the Rights Agreement. Rights will generally become exercisable if any person (or any persons acting as a group) acquires Beneficial Ownership (as defined in the Rights Agreement) of 10%, or 20% in the case of certain passive investors, or more of the Companys outstanding common stock. If Rights become exercisable, all holders of Rights (other than the person, entity or group triggering the Rights Agreement, whose rights will become void and will not be exercisable) will have the right to purchase from the Company for $75.00, subject to certain potential adjustments, shares of the Companys common stock having a market value of twice that amount. On May 30, 2025, the Company entered into Amendment No. 1 to the Rights Agreement to extend the expiration time of the Rights for one year to June 4, …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing