Greetings, and welcome to the DMC Global Q3 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Geoff High, Vice President of Investor Relations. Thank you, Geoff. You may begin. Hello, and welcome to DMC's third quarter conference call. Presenting today are DMC's Chief Executive Officer, Mike Kuta, and Chief Financial Officer, Eric Walter. I'd like to remind everyone that matters discussed during this call may include forward-looking statements that are based on our estimates, projections, and assumptions as of today's date, and are subject to risks and uncertainties that are disclosed in our filings with the SEC. Our business is subject to certain risks that could cause actual results to differ materially from those anticipated in our forward-looking statements. DMC assumes no obligation to update forward-looking statements that become untrue because of subsequent events. Today's earnings release and a related presentation on our third quarter performance are available on the investor page of our website, located at dmcglobal.com. A webcast replay of today's presentation will be available at our website shortly after the conclusion of this call. With that, I'll now turn the call over to Michael Kuta. Mike? Good afternoon, everyone. DMC's third quarter was marked by both strategic accomplishments and operational challenges. We reported consolidated sales of $172 million, flat versus last year's third quarter, and below our prior forecasts. Sales at Arcadia, our building products business, were $72 million, down 11% year-over-year. Steady customer activity at Arcadia's primary regional service centers, as well as healthy sales at its ultra-high-end residential business, were offset by pricing pressure associated with lower raw material costs, soft demand for commercial interior products, and a brief operational slowdown related to the transition to a new ERP system. DynaEnergetics, our energy products business, reported sales of $73 million, up 4% year-over-year, but down 14% sequentially. The U.S. drilling and completion industry idled additional rigs and frac crews during the quarter, and the Energy Information Administration reported a 10% sequential decline in U.S. well completions. Dyna's U.S. sales also were impacted by customer project delays late in the quarter. Soft sales in the U.S. were partially offset by continued strong demand at Dyna's international business, which expects to deliver record full-year sales in 2023. Sales in NobelClad, our composite metals business, improved 18% to $28 million versus last year's third quarter. NobelClad's results reflect outstanding execution on a demanding petrochemical project, as well as continued strong demand for pressure vessel plates and specialized transition joints. NobelClad ended the third quarter with an order backlog of $61 million versus $64 million at the end of the second quarter. Rolling twelve-month bookings were $111 million, up sequentially from $108 million, and the book-to-bill ratio was 1.1. Our consolidated third quarter adjusted EBITDA attributable to DMC was $25 million, or 14.3% of sales, and was within our forecasted range, despite the lower-than-expected sales. DMC's long-term focus is to position each of its businesses to deliver adjusted EBITDA margins of 20% or greater. Our businesses are structuring their operations and making the necessary investments to achieve these objectives on a consistent basis. At Arcadia, additional paint capacity, a new ERP system, and a series of operational enhancements and growth initiatives are expected to drive long-term improvements in sales and profitability. In the North American oil and gas market, where Dyna generates approximately 85% of its sales, we expect continued consolidation by leading operators will sharpen the completion industry's focus on safety, technology, and efficiency. Dyna, which had a challenging third quarter, has taken a number of steps to streamline its cost structure and will incur roughly $1 million in associated one-time expenses during the fourth quarter. These cost reductions are expected to result in approximately $3 million in annualized savings. Dyna also is implementing a series of operational excellence initiatives designed to enhance the safety, quality, and reliability of its perforating systems. These initiatives include greater use of automation throughout Dyna's manufacturing and assembly facilities. NobelClad is focused on expanding the market for its DetaPipe and Cylindra product lines, and is pursuing emerging opportunities in lithium and hydrogen production. We expect 2024 will be another strong year at NobelClad. As Eric will discuss in a moment, much improved free cash flow led to further improvements in our financial position during the third quarter. I remain encouraged by the strengths of our differentiated manufacturing businesses and our prospects for profitable long-term growth. DMC's achievements would not be possible without the efforts of our talented workforce. I want to acknowledge all of our employees for their hard work and dedication. I also want to thank our customers for their loyalty. With that, I'll turn the call over to Eric for a closer look at our third quarter financial results and our guidance for the fourth quarter. Eric? Thanks, Mike. As previously mentioned, our consolidated third quarter sales were $172 million, down 1% from the third quarter last year. Consolidated gross margin was 30.6%, up 110 basis points from our 2022 third quarter. due to a more favorable project mix at NobelClad, combined with margin recovery at Arcadia. Our third quarter SG&A expense of $29 million was 16.7% of sales, down from 17.5% in the third quarter of last year, driven mostly by lower litigation expense at Dyna. Third quarter adjusted EBITDA, EBITDA attributable to DMC increased by 13% year-over-year to $25 million. The improvement was primarily driven by higher sales and gross margin at NobelClad. Inclusive of the Arcadia non-controlling interest, consolidated adjusted EBITDA was $30 million, or 17.4% of sales, up 220 basis points versus the prior year quarter. At the business level, Arcadia reported third quarter adjusted EBITDA of $13 million, of which $8 million, or 60%, was attributable to DMC. Compared with the prior year, Arcadia's adjusted EBITDA rose 11% and expanded 390 basis points as a percentage of sales. While Arcadia's pricing has moderated this year, aluminum costs have declined at a faster pace and contributed to the recovery in EBITDA margin. Dyna reported third quarter adjusted EBITDA of $13 million, or 17.2% of sales. Lower absorption of manufacturing overhead costs and a less favorable customer mix led to a sequential and year-over-year margin contraction. NobelClad reported adjusted EBITDA of $6 million, which was 23.1% of sales and up 850 basis points compared to the third quarter of 2022. EBITDA margin improved due to a more favorable project mix, better absorption of fixed manufacturing overhead costs, and lower SG&A. Adjusted net income attributable to DMC was $10 million during the third quarter of 2023. Adjusted EPS attributable to DMC was $0.50, up over 40% compared to last year's third quarter. Underlying improvements in gross margin and SG&A more than offset relatively flat sales performance year-over-year. During the quarter, DMC generated free cash flow of $22 million, which was the highest quarterly level since 2019, and was up from $17 million in last year's third quarter. We used this year's third quarter free cash flow primarily for principal payments on our long-term debt, distributions to our Arcadia joint venture partner, and an investment in marketable securities, which will be used as part of our deleveraging efforts. In terms of liquidity, we ended the third quarter with cash and marketable securities of $36 million and had no amounts outstanding under our $50 million revolver. Our debt to adjusted EBITDA leverage ratio was 1.26 at the end of the third quarter, which was well below our covenant threshold of 3.0, and represents the 7th consecutive quarter of deleveraging the balance sheet. On a pro forma net debt basis, after subtracting cash and marketable securities, our leverage ratio was 0.89 at the end of the third quarter. Now, turning to fourth quarter guidance. Consolidated sales are expected in a range of $170 million-$180 million, versus the $172 million reported last quarter. We anticipate Arcadia's fourth quarter sales volume to be relatively flat sequentially. Dyna expects to maintain its share in its core North American markets, but does anticipate overall activity levels will remain soft, due in part to year-end seasonality. NobelClad sales are expected to accelerate sequentially as the business benefits from delivery of key projects already in its backlog. Consolidated gross margin is expected in a range of 28%-30%, compared with the 30.6% in the third quarter. Gross margin at Arcadia and Dyna is expected to be relatively flat quarter over quarter, while NobelClad's gross margin will moderate based on project mix. Consolidated fourth quarter SG&A expense is expected to range from $28 million-$29 million versus the $29 million reported in the third quarter. Fourth quarter adjusted EBITDA attributable to DMC is expected to be in a range of $20 million-$24 million versus $25 million in the third quarter. Finally, we expect fourth quarter capital expenditures will be in a range of $8 million-$10 million. With that, we're ready to take any questions. Operator? Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we call for questions. Thank you. Our first question is from Gerry Sweeney with ROTH Capital Partners. Please proceed with your question. Good afternoon, Mike, Eric, and Geoff. Thanks for taking my call. Hi, Gerry. Hey, Gerry. On the—can we start with Arcadia? Can you break out, you have the service center work, which I think, for lack of a better term, the sticks that go to a lot of sort of, storefronts, different and, you know, pedestal-type operations of buildings, ultra high-end, and then the interior, commercial interiors. It sounded like the commercial interior business was slow, but I wanted to see how that compared with the other two businesses. Were the other two businesses in line? Was it entirely commercial interiors? Just want to dig in a little deeper on that front. Yeah. Thanks, Gerry. So the commercial interiors, which is our smallest business, we see that in our, within Arcadia. You know, that's in a valley, right now, at least the work that, that we're seeing, with commercial interior build-out. The commercial exteriors business has been, relatively, I'd call it, flat, resilient. Seeing a little bit of softening, in some of the, you know, longer cycle projects. But the short cycle projects, which, you know, you know, there's a lot of, diversification in our, end markets there, you know, is, is holding up, pretty, pretty well. Got it. And wanted to talk about, you know, you've been at capacity in that business, and you also have-- you've added areas like Houston and Dallas, and for these are my words, not yours, maybe underserved because of capacity issues. You're adding paint capacity to sort of expand that. How do we look at, you know, some of the maybe little softness on the longer projects versus short cycle, versus adding capacity and sort of maybe investing in new locations? How does that all come together in terms of growth and opportunities? Yeah, in the West Coast, we're definitely in a bit of a softer market. You look at the ABI readings, you know, sub 45. But there's still a lot of opportunity in a lot of our markets where we're still seeing some some strength. So, you know, we're moving around some of the some of the project business into some of our service centers, you know, that might be seeing a little less activity and pushing on the gas pedal on, you know, areas where activity remains strong. So, you know, I think that if if we go into a softer softer market, you know, I think there's gonna be an opportunity to drive the drive the top line at still favorable margins. So this paint capacity that we're putting in place, we've done some industrial engineering there. We've got more paint capacity we can put in by mid-next year. I think we're gonna, we're gonna be able to sell it through. Got it. And then, just last question on Arcadia. How much was sort of the ERP. How much did the ERP implementation impact the quarter? Yeah, Gerry, so we probably lost 2-3 days with our service center or short cycle business, and that unfortunately were canceled orders, so they're not gonna come in to Q4. So when you think about the impact to Q3 revenues, you know, that was as meaningful of an impact as the other two drivers that we talked about. Got it. So a third, a third, a third. Got it. Yeah. One question on Dyna, and then I don't want to monopolize this, but, I think you said completions, EIA, were down 10%. I think you were down 14%. In this market, obviously, things have slowed down. Everybody's looking at 2024 expectations, completions are up. Are we sort of in this market where, a similar market for the third quarter, maybe even the fourth quarter, that was similar to a couple of years ago, where everybody knows the benefits of Dyna? It's a premium product, but they've got crews, and they're sort of idling them a little bit. There's no sense in paying up for the benefit that Dyna brings when there's a little bit of softness and they have capacity. Is that what we're potentially seeing? Yeah. I think, Gerry, what we're seeing is, you know, we have a-- we just finished a pretty strong October. And, you know, I think we'll see some seasonality at the end of the year. So I think Dyna is gonna look in the fourth quarter, maybe similar to the third quarter. That's in our guidance. Eric, you can speak to that, but I think some of the initiatives we're taking in DynaEnergetics are really gonna drive results also as we go into 2024, and I think we'll see a bit better of a market as well. Yeah. Got it. I think just to augment what Mike said, so some of the softness in Q3 was due to some projects that were pushed out. Mm-hmm. We believe that those projects are gonna materialize in Q4. So while the top line may be relatively flat, we haven't lost that business. It just skipped out one quarter. Got it. That's helpful, too. Okay, I'll jump back in line. Thank you. Thanks, Gerry. Thank you. Our next question is from Stephen Gengaro with Stifel. Please proceed with your question. Thanks. Good afternoon, everybody. I guess a couple- Good afternoon. On the, a couple on the Dyna side. The first is just around what you're seeing from a pricing perspective, now versus a couple of months ago, and any expectations going forward? Yeah, you know, so we all we cited, you know, sales down, absorption, you know, customer and pricing mix. So you've seen a little bit more pressure on price with the market down 10%. Hopefully, you know, we're gonna see, you know, pricing stabilize here, and I think going into 2024, you know, we'll, we'll see where things shake out, but I would think that we'd be in a pretty stable pricing environment. Okay, thank you. And when we think about what has gone on in the U.S. landside, and particularly, you know, the pressure pumpers have consolidated. You got, you know, four holding a lot of the capacity. More of them have their own internal wireline capacity. Is that, How should we think about the integration of wireline and frack within ene SC, the impact it has on you? Is it positive? Is it negative? Is it neutral? Is there any read-throughs from that? Yeah, I think the frack and wireline's just very focused on, you know, the basics, right? Quality, on-time delivery, delivering the best tech in the industry, a nd if we can do that and continue to do that, you know, I think we're gonna be okay there. All right. And then just one final. When we think about the quarter, the third quarter results and as we lead into the next quarter and the next year, how do we think about incremental margins or margin trajectory in Arcadia and Dyna as you get into 2024? And we're kind of assuming some level of recovery in frack and completion activity next year, b ut as you get growth in the businesses, is there a way to kind of think about the incremental margin contribution or margin trajectory in those two businesses? Yeah, I'll start, and Eric will finish. I think with Arcadia, it's a pretty high variable cost type business, so we're gonna, you know, we're in the right zip code now from a margin standpoint. We should probably be operating in that area for, you know, Q4 and beyond. DynaEnergetics, a bit more absorption impact there. We've got a lot of projects that we're doing to drive margin from an internal standpoint, and we've cited some of them, but lean initiatives, automation, we've done some cost reductions as well. So, you know, we think we can drive margin, continue to drive margin in the into 2024, probably flat, Q3 to Q4. But we got a lot of things that are in the, you know, kind of in our project plan for 2024 to continue to drive margins, things that are under our control. Yeah. Yeah, the only thing I would add to what Mike said is that for Dyna, the focus really is gonna be more on their EBITDA margins as opposed to the gross margins. Gross margins will always be important, but some of the initiatives that Mike pointed to around SG&A control, they're really gonna manifest themselves in the EBITDA margin line as opposed to gross margin, a nd we continue to believe that this is a 20%+ EBITDA margin business and wanna make sure that we put in these initiatives so that we not only get back to that, but we stay there. Okay. Thanks, all. I'll get back in the line here. Thank you. Thank you. Our next question is from Katie Fleischer with KeyBanc Capital Markets. Please proceed with your question. Hi, good afternoon. I'm on for Ken Newman today. Hi. Hi. I wanted to talk a little bit about your capital allocation. So free cash flow is, you know, pretty strong in the quarter. Can you just talk about expectations for free cash flow generation going forward, and then what some of your capital allocation priorities would be? Yeah. Thanks for the question. So for Q4 and what I would say going into 2024, we're really trying to drive the businesses to have a higher free cash flow conversion. So if you did the math for Q3, we would be up around 70%. I'm not sure that we can do that every quarter, but typically in the second half of the year, because of seasonality, we tend to be around that range. So in Q4, we would be looking to be up, you know, in that ballpark, as well. And then, going forward in the next year, a lot of the things that Mike was talking about earlier when he answered the question about initiatives, they have a P&L impact, but they also have a cash flow impact as well, whether it's, you know, reducing SG&A or driving higher inventory turns. So we would look to try to build on that momentum and, make sure that we can keep the conversion at a higher rate. And in terms of how we allocate the capital, we are looking to continue to delever the balance sheet, so that's gonna be one area. But we're also putting CapEx back into the business. So for Arcadia, Mike mentioned the, paint line, where we're gonna be looking to do some industrial engineering. We're also gonna be looking at making some investments in the anodizing area as well, which will help broaden margins for the Arcadia business. And for Dyna, it's gonna be mainly focused on a lot of the internal initiatives around automation and trying to make sure that we can produce our products as efficiently as possible, which should also have an impact on sustainable quality levels. So I, I think in terms of where we wanna be from a cash flow standpoint, we had a good Q3. We wanna make sure that that's not just a one-time type of performance, but we can continue that going forward. And then in terms of the allocation, we're gonna be looking to continue to delever, but also reinvesting back in the business in some of these important initiatives. Okay, great. That's helpful, a nd then on the well completions, do you guys have any sort of, idon't know, it's difficult, in this type of environment, but any sort of view in terms of where those are headed, as we kind of close out the year and go into 2024? Yeah, I think that what you're gonna see is pretty steady through the end of the year. Probably hit some seasonality at the end of the year with budget exhaustion, and I think then you're gonna see a pickup in 2024. Okay. And then, just one last one, switching to Arcadia here. Can you give a little bit more detail about the ERP system? Like, how much capacity that can add, maybe any impacts on costs or margins would be helpful. Yeah. So the ERP system probably wouldn't add any capacity, but what it's gonna allow us to do is to have better controls and better visibility into data. And so the first one's probably pretty, you know, self-explanatory. But the second one, what we mean by that is, that we think that it's gonna provide or prevent any type of margin, margin leakage between changes in aluminum costs and our ability to pass that through to customers. But another benefit that we're really excited about is it should also allow us to be more efficient from an inventory turn standpoint. So if you think about our business model, we've got a hub-and-satellite type of structure. With this newer ERP system, we're gonna have a better understanding of where that inventory is, how it's turning at the different satellites, and how we can transfer it from maybe one satellite, where it's moving slower, into another one, where it's moving, you know, faster. So we're excited about that, and we're just in the early days of, you know, going through the implementation, but I think it's gonna pay dividends long term. Okay. Thanks for the details. Thanks, Katie. As a reminder, as a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question is from Sean Mitchell with Daniel Energy Partners. Please proceed with your question. Hi, guys. Thanks for taking the question. This obviously revolves around Dyna, but you mentioned earlier in the call that the larger, I think, M&A will sharpen the focus of some of these companies on safety, and then you also talked about for the quarter, just having a less favorable customer mix. Can you? Is there any way you can kind of help us understand just the customer mix today? and obviously, I think where it's going is probably favorable with these kind of larger companies doing bigger deals, and I tend to agree with you, they will focus more on safety. But where are you today and kinda the You know, is it heavier on the private side today, and that's why we saw a little bit more kind of downward pressure in the quarter? Or is it, you know. Give us, give us a little color around the customer mix today and maybe where you think it's going? Yeah, I mean, if, if we rewind, you know, a year or two years ago, it was probably a heavier mix on the private side. It's shifted more towards the public side when you're—if you're talking about the the E&Ps, Yeah Or end users. You know, from a customer standpoint, you know, we feel aligned with the best in terms of end users as well as service companies, a nd so I think that it, you know, this is something that's gonna, you know, can play to our favor, especially we deliver on the, you know, when I say safety, I say quality, delivery, field service, and technology, you know, particularly, as the market moves more towards oriented systems. So I think that's all gonna work well for us. Got it. Thank you. Thank you, Sean. Thank you. Our next question is from Stephen Gengaro with Stifel. Please proceed with your question. Thanks. Just one quick one. Do you have any preliminary, I know it's early, preliminary thoughts on 2024 CapEx? I think, right now, Stephen, for modeling purposes, I would assume something that's pretty close to the guidance that we've given for 2023. There may be a little bit of an increase for some of the discrete projects that we talked about earlier, for anodizing, et cetera, but the run rate that we have this year is probably gonna be very similar to the run rate next year. Okay, great. That was, that was all for me. Thank you. Thank you. There are no further questions at this time. I would like to hand the floor back over to Michael Kuta for closing comments. Thank you again for joining us today. We remain highly focused on driving performance of DMC's businesses. Our objective is to strengthen our profitability and cash flow and drive improved value for our shareholders. We appreciate your continued interest in DMC and look forward to speaking with you after the fourth quarter. Take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.