OUR STORY 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. 2
SELECT DATA 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 $5.91 - $17.19 35,903 $205 Million 14.5 Million 13.9 Million December 31 $0.02 $158.6 Million $9.1 Million BOOM 1-Year Price & Volume *Non-GAAP financial measure 3
REVENUE BY BUSINESS NobelClad DynaEnergetics $ in millions 2015 2016 $90.0 $76.9 $91.3 $67.3 (54%) (46%) (58%) (42%) 4 2017 Investor Presentation DMCGlobal.com 4
DMC EXECUTIVE LEADERSHIP KEVIN LONGE President & CEO MICHAEL KUTA Chief Financial Officer MICHELLE SHEPSTON Chief Legal Officer 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) 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 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 5
LEADERSHIP TEAM IAN GRIEVES President, DynaEnergetics JOHN SCHEATZLE President, NobelClad BIN ZHANG Managing Director, China, DMC 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 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 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 6
OUR CULTURE 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. 7
CHAPTER & PAGE TITLE HERE REPRESENTATIVE: NAME & POSITION HERE 8
DYNAENERGETICS OVERVIEW 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. 9
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% 2017 Investor Presentation DMCGlobal.com 10
PERFORATING BASICS 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. 11
DYNAENERGETICS MARKET INDICATORS: RIG COUNT BY GLOBAL REGION US Europe Africa Asia Pacific 2,000 200 300 1,600 160 280 260 1,200 800 400 120 80 240 220 200 180 2/3/2017 1/31/2017-40 160 2/26/2014 5/26/2014 8/26/2014 11/26/201 4 2/26/2015 5/26/2015 8/26/2015 11/26/201 5 2/26/2016 5/26/2016 8/26/2016 11/26/201 6 2/26/2014 5/26/2014 8/26/2014 11/26/201 4 2/26/2015 5/26/2015 8/26/2015 11/26/201 5 2/26/2016 5/26/2016 8/26/2016 11/26/201 6 2/26/2014 5/26/2014 8/26/2014 11/26/201 4 2/26/2015 5/26/2015 8/26/2015 11/26/201 5 2/26/2016 5/26/2016 8/26/2016 11/26/201 6 1/31/2017 800 Canada 500 Middle East 500 Latin America 2/3/2017 700 600 500 400 300 200 100-450 400 350 300 250 200 400 300 200 100-1/31/2017 1/31/2017 1/31/2017 2/26/2014 5/26/2014 8/26/2014 11/26/201 4 2/26/2015 5/26/2015 8/26/2015 11/26/201 5 2/26/2016 5/26/2016 8/26/2016 11/26/201 6 2/26/2014 5/26/2014 8/26/2014 11/26/201 4 2/26/2015 5/26/2015 8/26/2015 11/26/201 5 2/26/2016 5/26/2016 8/26/2016 11/26/201 6 2/26/2014 5/26/2014 8/26/2014 11/26/201 4 2/26/2015 5/26/2015 8/26/2015 11/26/201 5 2/26/2016 5/26/2016 8/26/2016 11/26/201 6 1/31/2017 2017 Investor Presentation DMCGlobal.com 12
DYNAENERGETICS MARKET INDICATORS: U.S. RIG COUNT BY TYPE Horizontal Directional Vertical 1,600 1,400 2/3/2017 1,200 2/3/2017 1,000 2/3/2017 800 2/3/2017 600 400 200-12/26/201 6 10/26/201 6 8/26/2016 6/26/2016 4/26/2016 2/26/2016 12/26/201 5 10/26/201 5 8/26/2015 6/26/2015 4/26/2015 2/26/2015 12/26/201 4 10/26/201 4 8/26/2014 6/26/2014 4/26/2014 2/26/2014 2017 Investor Presentation DMCGlobal.com 13
DYNAENERGETICS MARKET INDICATORS: U.S. LAND FRAC ACTIVITY 14
DYNAENERGETICS PERFORMANCE Sales Adjusted EBITDA* 22.4 1 105.5 76.9 83.7 11.9 67.3 1 8.1 1 2.5 2013 2014 2015 2016 2013 2014 2015 2016 $ in millions *Non-GAAP financial measure 2017 Investor Presentation DMCGlobal.com 15
TOTAL WELLS FRAC ED AND FORECAST 10,000 9,000 8,000 7,000 6,000 Forecast 5,000 4,000 3,000 2,000 1,000 0 22Q1 21Q4 21Q3 21Q2 21Q1 20Q4 20Q3 20Q2 20Q1 19Q4 19Q3 19Q2 19Q1 18Q4 18Q3 18Q2 18Q1 17Q4 17Q3 17Q2 17Q1 16Q4 16Q3 16Q2 16Q1 15Q4 15Q3 15Q2 15Q1 14Q4 14Q3 14Q2 Total Horizontal Vertical/Directional 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% 16
TOTAL FRAC STAGES AND FORECAST 140,000 120,000 100,000 Forecast 80,000 60,000 40,000 20,000 0 22Q1 21Q4 21Q3 21Q2 21Q1 20Q4 20Q3 20Q2 20Q1 19Q4 19Q3 19Q2 19Q1 18Q4 18Q3 18Q2 18Q1 17Q4 17Q3 17Q2 17Q1 16Q4 16Q3 16Q2 16Q1 15Q4 15Q3 15Q2 15Q1 14Q4 14Q3 14Q2 Total Horizontal Vertical/Directional 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% 17
PRIMARY COMPONENTS OF A PERFORATING SYSTEM 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 2017 Investor Presentation DMCGlobal.com 18
DYNAENERGETICS PRODUCT INNOVATIONS 01 02 DynaSelect Detonators DynaStage Perforating System Integrated, intrinsically safe & selective Factory assembled, performance assured technologies Incorporates DynaSelect intrinsically safe Enables concurrent perforating and fracturing detonating technology Reduces the risk of accidents No wiring connections reduces set-up time to Time and cost savings from sequential gun seconds initiation Removes the potential for electrical connection Improved set-up times and reliability from errors fewer electrical wiring connections Eliminates gun loading steps Fully disposable and maintenance free 03 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 2017 Investor Presentation DMCGlobal.com 19
DYNASTAGE GUN SYSTEM 3-3/8 3-1/8 2-3/4 DynaStage Gun Module* Top Fire DynaSelect Detonator Ecoil Tandem Sub Adapter Quick Change GO-Style Firing Head Three Stage Gun String with Bridge Plug Multitronic V Firing Panel Top Fire DynaSelect Detonator* *patents pending 20
DYNASELECT AND DYNASTAGE PROVIDE BUSINESS MODEL ADVANTAGE CURRENT INDUSTRY MODEL DYNAENERGETICS MODEL: PRODUCT BENEFITS + BUSINESS MODEL ADVANTAGE 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 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 2017 Investor Presentation DMCGlobal.com 21
DYNAENERGETICS MOBILE MARKETING TRAILER 22
DYNAENERGETICS GROWTH INITIATIVES 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 23
SELECT END USERS 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 24
DYNAENERGETICS: PROACTIVE RESPONSE TO DOWN CYCLE 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. 25
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NOBELCLAD OVERVIEW 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 27
NOBELCLAD S PERFORMANCE Sales Adjusted EBITDA* 23.2 118.4 91.3 90.0 97.1 15.4 12.9 10.7 2013 2014 2015 2016 2013 2014 2015 2016 $ in millions *Non-GAAP financial measure 28
NOBELCLAD SALES BY GEOGRAPHY 2016 Sales: $91.3 Million United States / 42% Canada / 8% United Arab Emirates / 7% China / 7% Germany / 6% France / 4% Australia / 3% Italy / 3% Rest of World / 20% 2017 Investor Presentation 29
EXPLOSION WELDING PROCESS 2017 Investor Presentation DMCGlobal.com 30
DEMAND DRIVERS FOR EXPLOSION WELDING 01 Global Infrastructure Investment 02 Corrosive Environments 03 Design Flexibility 2017 Investor Presentation DMCGlobal.com 31
NOBELCLAD S COMPETITIVE ADVANTAGE NobelClad s dominant position in the explosion welding industry is protected by significant barriers to entry. Global network of specialty metals providers Permits and shooting sites in U.S., France, and Germany Mastery of explosion-welding process for large-scale production Strong working relationships with end-market customers Titanium clad pressure vessels image courtesy of Coek Engineering. 32
NOBELCLAD GROWTH INITIATIVES Expanding market share in Asia R&D focused on new clad plate applications Applying process expertise to new market development Strengthening global sales force with addition of end-market experts Expanding production capabilities with new European manufacturing facility Separating equipment A natural gas production facility where NobelClad s explosion welded plates were used in the fabrication of specialized pipes. 33
PRIMARY END MARKETS SERVED Chemical Oil and Gas Metals and Mining Marine Power Generation Alternative Energy Industrial Refrigeration Transportation Defense and Protection 34
SELECT END USERS Chemicals Refining Mining Engineering NobelClad provides value to its industrial and infrastructure customers by collaborating at every stage of development. During design phases, NobelClad is a key resource for process architects and engineers who often write NobelClad plates into their manufacturing specifications. 2017 Investor Presentation DMCGlobal.com 35
FINANCIAL PERFORMANCE REVIEW ($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% 1 $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% $9.0 6% *Non-GAAP financial measures 36
BALANCE SHEET HIGHLIGHTS Assets ($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 37
DMC S PERFORMANCE TENETS 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 38
CONTACT INFORMATION Contact DMC 5405 Spine Road Boulder, Colorado 80301, USA T 800-821-2666 Primary Contact Geoff High Vice President of Investor Relations E ghigh@dmcglobal.com T 303-514-0656 39
APPENDIX: USE OF NON-GAAP FINANCIAL MEASURES 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) noncash 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. Presentation 2017 Investor Title Presentation 3/10/2017 DMCGlobal.com 40