dynamic materials corp - investor presentation

© 2015 DMC. All rights reserved. INGENUITY IN ACTION.

Investor Presentation January 2015

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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CHAPTER 1

2015 Investor Presentation 3

DMC Overview

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DMC is a growth company focused on building a family of technical product and process businesses for the global energy, industrial and infrastructure markets. We serve a network of industrial customers through a family of technical businesses that currently is comprised of NobelClad and DynaEnergetics. The DMC family consists of a global network of production facilities and sales and distribution centers. Our global footprint is critical to successfully meeting the demands of our customer base.


OUR STORY

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SELECT DATA

BOOM $14.84 - $24.00 63,000 $210 Million 13.9 Million 13.0 Million December 31 $0.04 $199.9 Million $28.4 Million


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

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* Reflects approximately $5.6 million in non-recurring expenses ** Reflects approximately $1.2 million in tax benefits recognized during the first quarter

2015 Investor Presentation

FINANCIAL HIGHLIGHTS

6

$ in millions Year-end numbers

9-month numbers

**

*

Sales Operating Income Income from Continuing Ops Adjusted EBITDA

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DMC’S SECTOR FOCUS


BUSINESSES

SECTORS Industrial and Infrastructure Energy

DESCRIPTION

SOLUTIONS FOCUS

Explosive Metalworking Perforating Components & Systems

Products and technical processes that support industrial and infrastructure markets.

Consumables, products and systems that support the global oil and gas industry.

PRODUCTS/SERVICES

Synthetic Diamond Manufacturing

•  Plates •  Heads •  Rolled & Tacked Cylinders •  Tubesheets •  Transition Joints •  Cylindricals •  Fabricated Components

•  Perforating Guns •  Explosive Shaped Charges •  Detonating Cords •  Detonators •  Explosive Control Systems

•  Industrial Diamonds

NobelClad DynaEnergetics

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REVENUE BY BUSINESS


8

$83.7 (41%)

2013 2014 9-Months

$118.4 (59%) (49%)

$76.2 (51%)

NobelClad DynaEnergetics

$ in millions

$74.4

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CHAPTER 2


Opportunity

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BUSINESS OPPORTUNITY

10

DMC companies serve the world’s multi-trillion dollar industrial, infrastructure and energy industries, which are addressing major capital investments in both established and emerging markets. In North America, a resurgence in oil and gas production and a renewed focus on chemical processing capacity are creating considerable opportunities for each of DMC’s businesses. In the world’s emerging markets, demand for energy and modern industrial processing infrastructure is also leading to compelling growth prospects for DMC and its family of specialized product and process businesses.


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CHAPTER 3


Leadership Team

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EXECUTIVE LEADERSHIP


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)

RICHARD SANTA •  Named Senior Vice President, Business

Development in March 2014

•  Served as DMC’s Sr. VP, Chief Financial Officer and Secretary from 2008 to 2014

•  Joined DMC as Vice President, Chief Financial Officer and Secretary in October 1996

•  Responsible for integration of seven acquisitions while at DMC

•  Former Chief Financial Officer of Scott USA, a sports equipment manufacturer and distributor

•  Former senior manager with Price Waterhouse

President & CEO, DMC Sr. VP, DMC 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

CFO, DMC

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LEADERSHIP TEAM


JEFF NICOL President, NobelClad •  Became head of NobelClad’s newly unified

global operations in 2012

•  Previously VP and General Manager of DMC Clad Metal, North America

•  Joined DMC in 2008 as VP of Sales and Marketing

•  Spent 21 years with Alcoa, where he ascended to chief metallurgist and global marketing director

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

BIN ZHANG Managing Director, China, DMC •  Responsible for Chinese business development

and market positioning for NobelClad, DynaEnergetics and AMK Technical Services

•  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

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CHAPTER 4


Defining Characteristics

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DMC builds global companies by developing people and organizations. We institutionalize entrepreneurship and celebrate technical ingenuity. Our growth is fueled by energized, relevant and nimbly executed solutions that make a real difference to our customers. We offer a global manufacturing network with intimate localized service, so customers know they can rely on DMC companies when the stakes are high. DMC’s empowered and responsive management strategies are aimed at serving the world’s growth markets, giving investors high returns throughout varying economic cycles.


OUR CULTURE

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DMC TRAITS


The DMC family of brands share many traits that are critical to our growth and success.

Technical expertise, ingenuity and proficiency in our respective industries.

A culture of critical and creative thinking that allows us to innovate new solutions for our clients.

Empowerment to meet market demands through decisions made at the local level.

A passion for the processes that drive efficiency, dependability and ultimate value for our clients.

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CHAPTER 5


Solutions

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CHAPTER & PAGE TITLE HERE


REPRESENTATIVE: NAME & POSITION HERE

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DYNAENERGETICS OVERVIEW


A top-tier provider of compatibility tested perforating systems.

Acquired in 2007 as new platform business for DMC. Unmatched global reach serving oil and gas service providers, with approximately 7% global market share. Reputation for product safety, technical innovation and systems reliability under extreme environmental conditions. Significant portion of product sales come from well re-perforations and workovers. Perforating and well completion technologies for improved productivity and lower operating cost.

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DYNAENERGETICS GROWTH MILESTONES

2007 – Company acquired DynaEnergetics, a new global platform business

2009 – Acquired LRI Oil Tools (Canada)

2010 – Acquired outstanding interests in two Russian oilfield product joint ventures

– Acquired Austin Explosives (Texas)

2012 – Acquired TRX Industries (Texas)

2013  – Opened distribution centers in Bogota, Columbia and West Texas

– Opening new shaped charge manufacturing plant for Americas (Texas)

2014 – Opened distribution centers in Western Pennsylvania and Bonnyville, Alberta

– Completing new gun and shaped charge manufacturing plant in Russia (Siberia)


à DMCGlobal.com 21 2015 Investor Presentation

DYNAENERGETICS PERFORMANCE


9-month numbers


DYNAENERGETICS SALES BY GEOGRAPHY

2013 Sales: $83.7 Million

United States / 42%

Canada / 14%

Russia / 7%

Iraq / 5%

India / 5%

United Kingdom / 4%

Kazakhstan / 3%

Rest of World / 20%

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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.

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DYNAENERGETICS COMPETITIVE ADVANTAGE


•  Manufacturing expertise and technical proficiency using industrial explosives

•  Robust product portfolio

•  Industry leading safe and selective detonating technology

•  Global distribution expertise

•  Strong industry relationships

•  Advanced Section IV Testing Facility simulates most challenging well environments

à DMCGlobal.com 25

DynaStageTM Gun System •  Pre-assembled, customizable gun system •  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 RF-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

40% fewer electrical wiring connections

01 02 03

Booster Transfer Module (BTM) •  Can only be initiated by a ballistic event …

will not fire due to hydrostatic or wellbore pressure

•  No moving parts •  Pressure tight after initiation to 14,000 PSI •  More cost effective to purchase and re-dress •  Simple, fast assembly and small footprint

DYNAENERGETICS PRODUCT INNOVATIONS


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DYNASTAGETM GUN SYSTEM


*patents pending Top Fire DynaSelect

Detonator* Multitronic V Firing Panel

Three Stage Gun String with Bridge Plug

DynaStage Gun Module*

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CREATING A SUSTAINABLE COMPETITIVE ADVANTAGE

27

COMPONENT DRIVEN SALES: •  Guns & Hardware •  Shaped Charges •  Detonating Cord •  Switch •  Detonators •  Control Systems

CUSTOMER USE REQUIREMENTS: •  Gun shop: Mix & match products

and assemble perforating systems

•  Field: Detonator wiring, gun string assembly, sub recovery

INDUSTRY CHALLENGES: •  Assembly errors lead to misfires •  Quality •  Safety •  Efficiency •  Operating Cost •  Complexity of Supply Chain

DynaSelect •  Integrated Switch Detonator

•  RF Safe •  Selective

•  Surface Tester •  Enhanced Control System DYNASELECT ADVANTAGES •  Higher value to Service Companies

•  Less field wiring •  Fewer misfires

•  Higher priced (to value) •  Reduced detonator wiring in the field •  Customer savings accrue in operations other

than wireline perforating

DynaStage™ •  Switch detonator eliminates field wiring, improves

reliability •  Gun armed on detonator installation •  Full factory assembly of gun systems •  Delivery of complete systems to field •  Maintenance free and disposable

DYNASTAGE ADVANTAGES •  Highest level of reliability, safety and efficiency

•  No misfires •  Reduced transportation costs and field labor •  Simplified supply chain •  Reduced working capital for customers •  Improved Service and E&P profitability

•  Gun shop no longer required •  Detonator wiring eliminated •  Sub recovery eliminated

CURRENT INDUSTRY MODEL DYNAENERGETICS MODEL: PRODUCT ADVANTAGE + BUSINESS MODEL ADVANTAGE


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DYNAENERGETICS GROWTH INITIATIVES


•  Investing in new technologies to expand product offerings

•  Forging strategic partnerships to enter new markets

•  Innovating solutions that meet anticipated market demand

•  Global launch of new brand marketing and digital assets to improve customer experience and service design

à DMCGlobal.com 2015 Investor Presentation 29

DYNAENERGETICS GLOBAL FOOTPRINT

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SELECT END USERS

30

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.

*


* *

* *

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DYNAENERGETICS MARKET INDICATORS: OIL PRICES


Oil S tatis tic s

$63.05 $69.00 $78.65 $92.75 $97.65

12/8/2014 -‐8.6% -‐19.8% -‐32.0% -‐35.4%

$65.67 $72.22 $82.38 $98.57 $111.69

12/8/2014 -‐9.1% -‐20.3% -‐33.4% -‐41.2%

* Mos t recent data reported on 08-‐Dec -‐2014** % box s how s ac tual rates for comparis on

1 Week Before**

1 Month Before**

3 Months Before**

1 Y ear Before**

Nymex WTI Crude

UK Brent Crude

Mos t Recent*

January-‐09

April-‐09

July-‐09

October-‐09

January-‐10

April-‐10

July-‐10

October-‐10

January-‐11

April-‐11

July-‐11

October-‐11

January-‐12

April-‐12

July-‐12

October-‐12

January-‐13

April-‐13

July-‐13

October-‐13

January-‐14

April-‐14

July-‐14

October-‐14

$-‐

$20

$40

$60

$80

$100

$120

$140

$/bb

l

WTI Crude UK Brent

January-‐09

April-‐09

July-‐09

October-‐09

January-‐10

April-‐10

July-‐10

October-‐10

January-‐11

April-‐11

July-‐11

October-‐11

January-‐12

April-‐12

July-‐12

October-‐12

January-‐13

April-‐13

July-‐13

October-‐13

January-‐14

April-‐14

July-‐14

October-‐14

January-‐15

April-‐15

July-‐15

October-‐15

January-‐16

April-‐16

July-‐16

October-‐16

January-‐17

April-‐17

July-‐17

October-‐17

January-‐18

April-‐18

July-‐18

October-‐18

$-‐

$20

$40

$60

$80

$100

$120

$/bb

l

Nymex WTI Crude Spot Price Analyst Forecast (Bloomberg Average 30+ Analysts)


DYNAENERGETICS MARKET INDICATORS: RIG COUNT BY GLOBAL REGION

Rig S tatis tic s

1,920 1,929 1,925 1,763

12/5/2014 -‐5.6% -‐1.0% 8.9%

149 148 143 137

11/30/2014 8.1% 16.8% 8.0%

255 252 255 240

11/30/2014 14.3% 0.0% 6.3%

422 429 414 385

12/5/2014 n/a n/a 9.6%

403 390 406 388

11/30/2014 40.0% -‐3.0% 3.9%

375 393 410 411

11/30/2014 -‐55.0% -‐34.1% -‐8.8%

142 125 125 135

11/30/2014 163.2% 54.4% 5.2%

3,670 3,657 3,642 3,452

11/30/2014 4.3% 3.1% 6.3%

Original Data S ource: Baker Hughes Rig S tatis tic s * Mos t recent data varies by region** % box s how s annualiz ed rates for comparis on

1 Y ear Before

World Total

Europe

A s ia Pac ific

Canada

Middle Eas t

Latin America

A frica

U.S .

Mos t Recent*

1 Month Before**

3 Months Before**

1,500

1,600

1,700

1,800

1,900

2,000

2,100

12/22/2011

3/22/2012

6/22/2012

9/22/2012

12/22/2012

3/22/2013

6/22/2013

9/22/2013

12/22/2013

3/22/2014

6/22/2014

9/22/2014

US

40

80

120

160

200

12/22/2011

3/22/2012

6/22/2012

9/22/2012

12/22/2012

3/22/2013

6/22/2013

9/22/2013

12/22/2013

3/22/2014

6/22/2014

9/22/2014

Europe Afr ica

200

220

240

260

280

300

12/22/2011

3/22/2012

6/22/2012

9/22/2012

12/22/2012

3/22/2013

6/22/2013

9/22/2013

12/22/2013

3/22/2014

6/22/2014

9/22/2014

Asia Pacific

-‐

100

200

300

400

500

600

700

800

12/22/2011

3/22/2012

6/22/2012

9/22/2012

12/22/2012

3/22/2013

6/22/2013

9/22/2013

12/22/2013

3/22/2014

6/22/2014

9/22/2014

Canada

200

250

300

350

400

450

500

12/22/2011

3/22/2012

6/22/2012

9/22/2012

12/22/2012

3/22/2013

6/22/2013

9/22/2013

12/22/2013

3/22/2014

6/22/2014

9/22/2014

Middle East

300

340

380

420

460

500

12/22/2011

3/22/2012

6/22/2012

9/22/2012

12/22/2012

3/22/2013

6/22/2013

9/22/2013

12/22/2013

3/22/2014

6/22/2014

9/22/2014

Lat in America


DYNAENERGETICS MARKET INDICATORS: U.S. RIG COUNT BY TYPE

Rig S tatis tic s

1,368 1,353 1,333 1,127

12/5/2014 13.3% 10.5% 21.4%

198 211 224 222

12/5/2014 -‐73.9% -‐46.4% -‐5.0%

354 365 368 414

12/5/2014 -‐36.2% -‐15.2% -‐14.5%

1,920 1,929 1,925 1,763

12/5/2014 -‐5.6% -‐1.0% 8.9%

* Mos t recent data reported on 05-‐Dec -‐2014** % box s how s annualiz ed rates for comparis on

Original Data S ource: Baker Hughes Rig S tatis tic s

1 Y ear Before

Direc tional

V ertical

Total Rig s

Horiz ontal

Mos t Recent*

1 Month Before**

3 Months Before**

-‐

200

400

600

800

1,000

1,200

1,400

1,600

12/22/2011

2/22/2012

4/22/2012

6/22/2012

8/22/2012

10/22/2012

12/22/2012

2/22/2013

4/22/2013

6/22/2013

8/22/2013

10/22/2013

12/22/2013

2/22/2014

4/22/2014

6/22/2014

8/22/2014

10/22/2014

Horizontal Directional Vertical

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DYNAENERGETICS MARKET INDICATORS: U.S. HYDRAULIC FRACTURING ACTIVITY

34 2015 Investor Presentation

N umbe r o f We lls F ra c tu re d N um be r o f S ta g e s F ra c tu re d pe r We ll N um be r o f S ta g e s F ra c tu re d Rig S tatis tic s

4,662 4,599 4,250

9/30/2014 5.5% 9.7%

2,760 2,840 3,462

9/30/2014 -‐11.3% -‐20.3%

101,600 98,100 86,800

9/30/2014 14.3% 17.1%

10,900 11,200 13,800

9/30/2014 -‐10.7% -‐21.0%

* Mos t recent data reported on 30-‐S ep-‐2014 Original Data S ource: Baker Hughes Rig S tatis tic s ** % box s how s annualiz ed rates for comparis on

Mos t Recent*

3 Months Before**

1 Y ear Before

V ertical/ Direc tional

Horiz ontal

V ertical/ Direc tional

Wells

S tages

Horiz ontal

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

Horizontal Vertical/Directional

0.0

5.0

10.0

15.0

20.0

25.0

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

Horizontal Vert ical/Directional

0

20

40

60

80

100

120

3/31/2011

6/30/2011

9/30/2011

12/31/2011

3/31/2012

6/30/2012

9/30/2012

12/31/2012

3/31/2013

6/30/2013

9/30/2013

12/31/2013

3/31/2014

6/30/2014

9/30/2014

Horizontal Vertical/Directional

à DMCGlobal.com 35

DYNAENERGETICS MARKET INDICATORS: OIL ECONOMICS

0

10

20

30

40

50

60

70

80

90

100

Eagl

e Fo

rd O

il Ti

er 1

Ba

kken

Tie

r 1

TFS

Tier

1

Nio

brar

a Ti

er 1

Ea

gle

Ford

Oil

Tier

2

Bakk

en T

ier 2

PR

B Ti

er 1

De

lawa

re B

one

Sprin

g M

idla

nd W

olfc

amp

Tier

1

Mid

land

Wol

fcam

p Ti

er 2

De

lawa

re W

olfc

amp

Nio

brar

a Ti

er 2

TF

S Ti

er 2

M

S Li

me

Tier

1

Mid

land

Wol

fber

ry V

t Tie

r 1

Bakk

en T

ier 3

SC

OOP

Oil

CTM

Tie

r 1

PRB

Tier

2

CTM

Tie

r 2

East

Texa

s Ea

gle

Ford

M

idla

nd W

olfc

amp

Tier

3

Uint

a Oi

l Ea

gle

Ford

Oil

Tier

3

CTM

Tie

r 3

MS

Lim

e Ti

er 2

M

idla

nd W

olfb

erry

Vt T

ier 2

TM

S

Breakeven WTI Price ($/bbl) for 10% ATROR*

Original Data Source: TPH (Data represented from Tudor Pickering Holt & Co. analysis)

*Assumes $3.75/mcf NYMEX **Tudor Pickering Holt & Co.

With WTI below $70, 500 U.S. land rigs at risk

by end of 2015, a ~25% y-o-y decline**


à DMCGlobal.com

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 (i.e. DynaSelect, DynaStage, BTM) that deliver step change in efficiency, performance and safety. Favorable environment to shift industry business model: Sell feature-rich perforating systems versus commoditized components. Capitalize on anticipated growth of well re-completion and workover projects. Manage internal costs.

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NOBELCLAD OVERVIEW

38

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.


à DMCGlobal.com

NOBELCLAD’S PERFORMANCE



9-month numbers

à DMCGlobal.com

2013 Sales: $118.4 Million

United States / 45%

South Korea / 10%

Germany / 6%

Canada / 5%

India / 4%

France / 3%

China / 2%

Rest of World / 25%


NOBELCLAD SALES BY GEOGRAPHY

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NOBELCLAD GROWTH MILESTONES

1965 – Company founded as Explosive Fabricators

1996 – Acquired Detaclad®, the explosion welding business of Dupont

2001 – Acquired Nobelclad (France)

2007 – Acquired Dynaplat (Germany)

2012 – Opened sales office in South Korea

2013  – Unified global explosion welding operations under NobelClad – Opened sales office in China

2014  – Acquired state-of-the art manufacturing facility in Germany

– Initiated restructuring program of European cladding operations


à DMCGlobal.com

EXPLOSION WELDING PROCESS


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DEMAND DRIVERS FOR EXPLOSION WELDING

43

03 Design Flexibility

02 Corrosive Environments

01 Global Infrastructure Investment


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BENEFITS OF CLAD


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NOBELCLAD’S COMPETITIVE ADVANTAGE


•  Global network of specialty metals providers

•  Permits and shooting sites in U.S., France, Sweden 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.

Explosion welding shot - NobelClad’s outdoor shooting facility near Rivsaltes, France.

à DMCGlobal.com

NOBELCLAD GROWTH INITIATIVES


•  Expanding market share in Asia

•  R&D focused on new clad plate applications

•  Applying process expertise to new market development

•  Global launch of new brand marketing and digital assets to improve customer experience and service design

Separating equipment – A natural gas production facility where NobelClad’s explosion welded plates were used in the fabrication of specialized pipes.


GLOBAL PRODUCTION & SALES FOOTPRINT

•

à DMCGlobal.com

PRIMARY END MARKETS SERVED


•  Chemical

•  Oil and Gas

•  Metals and Mining

•  Marine

•  Power Generation

•  Alternative Energy

•  Industrial Refrigeration

•  Transportation

•  Defense and Protection

à DMCGlobal.com

BOOKINGS BY END MARKET: 2008 REVENUE PEAK TO 2013 TROUGH


0

20

40

60

80

100

120

140

160

180

200

2008

Misc. / 10%

Shipbuilding / 2%

Ind. Refrigeration / 3%

Hydrometallurgy / 4%

Power Gen. / 7%

Aluminum / 11%

Alt. Energy / 13%

Oil & Gas / 22%

Chemical / 27%

2008 Bookings: $198.9M

0

20

40

60

80

100

120

140

160

180

200

2013

Misc. / 5%

Shipbuilding / 4%

Ind. Refrigeration / 3%

Hydrometallurgy / 0%

Power Gen. / 6%

Aluminum / 8%

Alt. Energy / 0%

Oil & Gas / 39%

Chemical / 35%

2013 Bookings: $108.4M

à DMCGlobal.com

CLADDING METAL PRICE CHANGES: 2008 REVENUE PEAK THROUGH 2013 TROUGH


Stainless Steel 304 Stainless Steel

316 Titanium Gr1 Inconel 625 Alloy 825 516-70 (Mill) 516-70 (Service

Center)

2008

2013

30% 38% 26% 40% 20% 12% 5%

Charts show decline in average price per pound paid by DMC. Metals make up 45% - 50% of the value of a typical explosion welding order.

à DMCGlobal.com

SELECT END USERS

51

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.


ENGINEERING PROCUREMENT & CONSTRUCTION (EPC) COMPANY BACKLOG INDEX

In M illions o f US D Cummulative Company Bac klog -‐ Index

189,074 195,959 152,018

-‐3.5% 24.4%

* Quarter to quarter grow th rate for 3Q14** Y ear to Y ear grow th rate for 3Q14

3Q14 2Q14* 3Q13**

Total

$-‐

$50,000

$100,000

$150,000

$200,000

$250,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

The EPC Backlog Index is a cummulative summary of the backlog for nine global companies that report quarterly backlog. These companies w ere chosen as their project revenue is primarily driven from petoleum based projects.

The companies are summarized below by their headquarters and % of revenue driven by petroleum projects (source Engineering New s Record) :Company Headquarters % PetroleumTechnip France 99%Fluor*** USA 65%KBR USA 50%CB&I USA 93%Jacobs USA 80%Samsung Eng. South Korea 68%Hyundai E&C*** South Korea 43%Foster Wheeler USA 74%Saipem Italy 97%

*** Petroleum (Oil & Gas) related segment backlog

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EPC COMPANIES, SELECT COMPANY PERFORMANCE – BACKLOG


In M illions o s US D Company Bac klog

24,382 27,188 21,448

-‐10.3% 13.7%

26,503 24,197 18,740

9.5% 41.4%

7,479 7,452 8,402

0.4% -‐11.0%

30,700 31,500 24,500

-‐2.5% 25.3%

18,400 18,500 17,200

-‐0.5% 7.0%

14,368 15,837 15,619

-‐9.3% -‐8.0%

33,199 33,521 16,312

-‐1.0% 103.5%

4,120 4,548 3,942

-‐9.4% 4.5%

29,923 33,217 25,854

-‐9.9% 15.7%

* Quarter to quarter grow th rate for 3Q14** Y ear to Y ear grow th rate for 3Q14

S aipem

KBR

CB&I

J acobs

S amsung Engineering

Hyundai E&C

Fos ter Wheeler

Fluor -‐ Oil & Gas S egment

3Q14 2Q14* 3Q13**

Technip

$-‐

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Technip

$-‐

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Fluor Oil and Gas

$-‐

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

KBR

$-‐ $5,000

$10,000 $15,000 $20,000 $25,000 $30,000 $35,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

CB&I

$-‐

$5,000

$10,000

$15,000

$20,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Jacobs

$-‐

$5,000

$10,000

$15,000

$20,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Samsung Engineering

$-‐

$10,000

$20,000

$30,000

$40,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Hyundai E&C

$-‐

$1,000

$2,000

$3,000

$4,000

$5,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Foster Wheeler

$-‐ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

Q4-‐2011

Q1-‐2012

Q2-‐2012

Q3-‐2012

Q4-‐2012

Q1-‐2013

Q2-‐2013

Q3-‐2013

Q4-‐2013

Q1-‐2014

Q2-‐2014

Q3-‐2014

Saipem

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CHAPTER 6


Financial Overview

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FINANCIAL PERFORMANCE REVIEW


($MM except per share amounts) 2011 2012 2013 9 Months 2013

9 Months 2014

Sales % growth

$199.0 38%

$192.7 -3%

$202.1 5%

$152.7 7%

$150.6 -1%

Gross Profit % margin

$52.2 26%

$57.7 30%

$58.1 29%

$45.3 30%

$45.5 30%

Operating Profit % margin

$15.8 8%

$16.0 8%

$11.0 5%

$9.9 6%

$10.2 7%

Adjusted EBITDA % margin

$29.9 15%

$31.7 16%

$26.6 13%

$21.2 14%

$23.0 15%

Income from Continuing Operations % Growth

$10.7 219%

$10.7 0%

$7.2 -33%

$6.8 0%

$7.1 -3%

Net Income % growth

$12.5 137%

$11.7 -6%

$7.5 -36%

$7.2 -18%

$7.0 4%

Diluted EPS % growth

$0.93 133%

$0.87 -6%

$0.54 -38%

$0.52 -20%

$0.50 -4%

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BALANCE SHEET HIGHLIGHTS


Assets ($MM) Dec. 31, 2012 Dec. 31, 2013 September 30, 2014

Cash, cash equivalents $8.2 $10.6 $14.9

Accounts receivables, net $35.2 $37.8 $30.9

Inventory $48.0 $41.2 $41.8

Total current assets $104.8 $103.7 $106.5

Total assets $235.4 $240.6 $229.6

Liabilities ($MM) Text here Text here

Total current liabilities $24.8 $31.6 $24.1

Lines of credit $37.8 $26.4 $26.0

Long-term debt $0.1 $0.0 $0.0

Total liabilities $73.0 $67.8 $60.7

Total stockholders’ equity $162.5 $172.8 $168.9

Total liabilities and stockholders’ equity $235.4 $240.6 $229.6

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CHAPTER 7


Summary

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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

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CONTACT INFORMATION


DMC 5405 Spine Road Boulder, Colorado 80301, USA T 800-821-2666

Geoff High Director of Investor Relations E [email protected] T 303-514-0656

Contact Primary Contact

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APPENDIX: USE OF NON-GAAP FINANCIAL MEASURES

1/7/15 Presentation Title 60

APPENDIX: USE OF NON-GAAP FINANCIAL MEASURES
