| COMPANY |
DMC Global Inc. |
| COURT |
United States District Court for the District of Colorado |
| CASE NUMBER |
24-cv-03387 |
| JUDGE |
The Hon. Michael E. Hegarty |
| CLASS PERIOD |
May 3, 2024, through November 4, 2024 |
| SECURITY TYPE |
Securities |
LEAD PLAINTIFF DEADLINE IS FEBRUARY 4, 2025.
If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.
Case Background:
DMC is a diversified industrial company that operates through three main business segments: (1) Arcadia Products - which specializes in architectural building products, including composite decking, railing, and other outdoor living products; (2) DynaEnergetics - which focuses on energy products, particularly relating to the oil and gas industry, such as perforating systems and other well-completion tools; and (3) NobelClad – which produces explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment, as well as specialized transition joints for use in construction of commuter rail cars, ships, and liquified natural gas processing equipment.
On October 21, 2024, after the market closed, DMC revised its third quarter 2024 sales guidance, expecting quarterly sales of $152 million (as compared to its prior guidance of $158 million to $168 million) attributed to weaker-than-expected sales at both Arcadia Products and DynaEnergetics. DMC also negatively revised its third quarter 2024 adjusted EBITDA guidance to approximately $5 million (as compared to its prior guidance of $15 million to $18 million), which included: (1) inventory and bad debt charges of $5 million at DynaEnergetics; and (2) lower fixed overhead absorption on reduced sales at both Arcadia and DynaEnergetics. Furthermore, DMC announced an approximately $142 million non-cash goodwill impairment charge associated with DMC’s acquisition of a controlling interest in Arcadia Products to reflect Arcadia’s recent financial performance and near-term outlook. On this news, the price of DMC common stock declined $2.36 per share, or approximately 18%, from a close of $12.93 per share on October 21, 2024, to close at $10.57 per share on October 22, 2024.
On November 4, 2024, after the market closed, DMC announced its third quarter 2024 financial results and revealed a $159.4 million net loss (inclusive of the aforementioned goodwill impairment charge). DMC stated that “persistent high interest rates have impacted sales to the high-end luxury home market and have resulted in continued soft commercial construction activity.” Additionally, DMC revealed that Arcadia Products was “executing a series of internal initiatives” to strengthen its operations. On the corresponding investor earnings call, Defendant Michael Kuta, the company’s Chief Executive Officer, revealed that Arcadia Products’ third quarter sales of $57.8 million was down 17% sequentially and down 19% year-over-year, and that Arcadia’s third quarter 2024 adjusted EBITDA margin was 5.8%, down from 17.8% in the second quarter and 18.8% year-over-year, attributed to “lower fixed cost absorption on reduced sales.” On this news, the price of DMC common stock declined $0.59 per share, or nearly 6%, from a close of $9.84 per share on November 4, 2024, to close at $9.25 per share on November 5, 2024.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, Defendants misrepresented and/or failed to disclose that: (1) the goodwill associated with Acadia Products was overstated; (2) DMC had inadequate internal systems and processes that adversely affected its operations and prevented it from ensuring reasonably accurate financial guidance and timely, accurate, and complete public disclosures; and (3) as a result, Defendants’ statements about the company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.