Investor Presentation
     March 2010




                        0
Cautionary Statement Regarding Forward-looking Information

This presentation contains, and the Company may from time to t...
Cautionary Statement Regarding Forward-looking Information

   Use of Non-GAAP Financial Measures
   Non-GAAP results used...
Key Data
    (As of 3/26/10)

     Symbol:                                 NASDAQ GS: BOOM
     52-week range:            ...
Executive Management

 ! Yvon Pierre Cariou - President and CEO

 ! Richard A. Santa - Sr. Vice President,
   CFO and Secr...
Company Overview

• World’s dominant provider of explosion-welded clad metal plates
   -   Diversified customer base in 8 ...
Financial Highlights

Net Salesmillions
        In             Operating Income

    In millions          In millions




...
Financial Highlights

Net Income                Diluted EPS
                  $24.6                 $2.00
    In millions
...
Business Segments
                         2009 Revenue by Segment


Explosive Metalworking       Oilfield Products     AM...
DMC’s Global Presence
Corporate Headquarters                       Oilfield Products Headquarters
Explosion Welding produc...
DMC 2009 Revenue by Region



                               Russia
  North America                  5%
                  ...
Competing Cladding Technologies
                                     Explosion Weld
        Rollbond                      ...
Key Demand Drivers for Explosion Welded Plates



     Corrosion


                              Industrial
              ...
Explosion Clad - a Critical Weapon in the Battle Against Rust


! “…a major industry challenge
  is the ‘rust crisis’ in t...
Explosion Welding – a Key Step in Pre-fabrication Process

                                 Explosion
     Metal Suppliers...
Selected End Markets Served by Explosion Welding

                                       Corrosion
      • Oil & Gas indus...
End Users Include Leading Players in Respective Fields

                                                  Fabricators

   ...
DMC’s Dominant Industry Position Protected by Significant
                            Barriers to Entry



  " Global netw...
Oilfield Products Segment

  • Manufactures explosive perforating
    systems and seismic devices for the
    internationa...
Explosive Perforating

                            The Perforation Process

                       1. After a wellbore is ...
Financial Performance Review

 ($mm)                                  2006     2007     2008    2009
 Sales               ...
Balance Sheet Highlights
(In thousands)

Assets                                           2007         2008          2009
...
Supplemental Information



                           22
Sales and Explosion Welding Backlog Progression:
Q1 2004 – Q4 2009




       In millions




                            ...
Capital Expenditures

              (in millions)




                              Actual   Forecast



Explosive Metalwo...
Progression of Adjusted EBITDA & Net Income

     (In millions)




                                              25
Thank you.



             26
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  1. 1. Investor Presentation March 2010 0
  2. 2. Cautionary Statement Regarding Forward-looking Information This presentation contains, and the Company may from time to time make, written or oral "forward-looking statements" within the safe harbor provisions of the Private Securities Litigations Reform Act of 1995. These statements include information with respect to our financial condition and its results of operations and businesses. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will," "continue," "project" and similar expressions, as well as statements in the future tense, identify forward-looking statements. These forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include: • The ability to obtain new contracts at attractive prices; • The size and timing of customer orders; • Fluctuations in customer demand; • Competitive factors; • The timely completion of contracts; • The timing and size of expenditures; • The timely receipt of government approvals and permits; • The adequacy of local labor supplies at our facilities; • The availability and cost of funds; • General economic conditions, both domestically and abroad; • The successful integration of acquisitions; and • Fluctuations in foreign currencies. The effects of these factors are difficult to predict. New factors emerge from time to time and we cannot assess the potential impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statement speaks only as of its date and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of such statement or to reflect the occurrence of unanticipated events. In addition, see "Risk Factors" for a discussion of these and other factors. You are encouraged to read the SEC reports of DMC, particularly its Form 10-K for the Fiscal Year Ended December 31, 2010 for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management. 1
  3. 3. Cautionary Statement Regarding Forward-looking Information Use of Non-GAAP Financial Measures Non-GAAP results used in this presentation are provided only as a supplement to the financ ial statements based on U.S. generally ac c epted ac c ounting princ iples (GAAP). The non-GAAP financ ial information is provided to enhanc e the reader's understanding of DMC’s financ ial performanc e, but no non-GAAP measure should be c onsidered in isolation or as a substitute for financ ial measures c alc ulated in ac c ordanc e with GAAP. Rec onc iliations of the most direc tly c omparable GAAP measures to non-GAAP measures are provided within the sc hedules attac hed to this release. EBITDA is defined as net inc ome plus or minus net interest plus taxes, deprec iation and amortization. Adjusted EBITDA exc ludes stoc k- based c ompensation and, when appropriate, other items that management does not utilize in assessing DMC’s operating performanc e (as further desc ribed in the attac hed financ ial sc hedules). None of these non-GAAP financ ial measures are rec ognized terms under GAAP and do not purport to be an alternative to net inc ome as an indic ator of operating performanc e or any other GAAP measure. Management uses these non-GAAP measures in its operational and financ ial dec ision-making, believing that it is useful to eliminate c ertain items in order to foc us on what it deems to be a more reliable indic ator of ongoing operating performanc e and the c ompany’s ability to generate c ash flow from operations. As a result, internal management reports used during monthly operating reviews feature the adjusted EBITDA. Management also believes that investors may find non-GAAP financ ial measures useful for the same reasons, although investors are c autioned that non-GAAP financ ial measures are not a substitute for GAAP disc losures. EBITDA and adjusted EBITDA are also used by researc h analysts, investment bankers, and lenders to assess operating performanc e. For example, a measure similar to EBITDA is required by the lenders under DMC’s c redit fac ility. Bec ause not all c ompanies use identic al c alc ulations, DMC’s presentation of non-GAAP financ ial measures may not be c omparable to other similarly-titled measures of other c ompanies. However, these measures c an still be useful in evaluating the c ompany’s performanc e against its peer c ompanies bec ause management believes the measures provide users with valuable insight into key c omponents of GAAP financ ial disc losures. For example, a c ompany with greater GAAP net inc ome may not be as appealing to investors if its net inc ome is more heavily c omprised of gains on asset sales. Likewise, eliminating the effec ts of interest inc ome and expense moderates the impac t of a c ompany's c apital struc ture on its performanc e. All of the items inc luded in the rec onc iliation from net inc ome to EBITDA and adjusted EBITDA are either (i) non-c ash items (e.g., deprec iation, amortization of purc hased intangibles and stoc k-based c ompensation) or (ii) items that management does not c onsider to be useful in assessing DMC’s operating performanc e (e.g., inc ome taxes and gain on sale of assets). In the c ase of the non-c ash items, management believes that investors c an better assess the c ompany’s operating performanc e if the measures are presented without suc h items bec ause, unlike c ash expenses, these adjustments do not affec t DMC' ability to generate free c ash flow or invest in its business. For example, by adjusting for deprec iation and amortization in c omputing EBITDA, users c an c ompare operating performanc e without regard to different ac c ounting determinations suc h as useful life. In the c ase of the other items, management believes that investors c an better assess operating performanc e if the measures are presented without these items bec ause their financ ial impac t does not reflec t ongoing operating performanc e. 2
  4. 4. Key Data (As of 3/26/10) Symbol: NASDAQ GS: BOOM 52-week range: $8.50 - $23.17 Average daily trading volume (3 mo.): 173,416 Approx. market capitalization: $202 million Shares outstanding: 13 million Approximate float: 12.3 million Fiscal year end: December 31 2009 revenue: $164.9 million 2009 EPS: $0.66 2009 EBITDA: $26.8 million 2009 operating cash flow: $29.5 million Cash (12/31/09): $22.4 million Quarterly dividend: $0.04 3
  5. 5. Executive Management ! Yvon Pierre Cariou - President and CEO ! Richard A. Santa - Sr. Vice President, CFO and Secretary ! John G. Banker - Sr. Vice President, Customers and Technology ! Rolf Rospek - CEO, DYNAenergetics and Oilfield Products segment 4
  6. 6. Company Overview • World’s dominant provider of explosion-welded clad metal plates - Diversified customer base in 8 primary end markets - Significant barriers to entry - International network of production and sales facilities - $50 million order backlog at end of 2009 • Three business segments provide diversified revenue streams • Strong operating cash flow and balance sheet • Low Cap Ex business model facilitates strong free cash flow • Talented management with deep industry experience • Long-term growth strategy 5
  7. 7. Financial Highlights Net Salesmillions In Operating Income In millions In millions 6
  8. 8. Financial Highlights Net Income Diluted EPS $24.6 $2.00 In millions In millions 7
  9. 9. Business Segments 2009 Revenue by Segment Explosive Metalworking Oilfield Products AMK Welding $134.1 Million $ 21.8 Million $ 9.0 Million 8
  10. 10. DMC’s Global Presence Corporate Headquarters Oilfield Products Headquarters Explosion Welding production centers Oilfield Products subsidiaries Explosion Welding sales offices and agents Oilfield Products sales agents 9
  11. 11. DMC 2009 Revenue by Region Russia North America 5% Europe 47% 23% Asia 17% Australia 2% Other Countries -– 6% 10
  12. 12. Competing Cladding Technologies Explosion Weld Rollbond Weld Overlay • Performed by small field of • Performed by small international competitors led by • Arc-welding process group of international Dynamic Materials Corporation typically performed hot rolling steel mills by metal fabricators • Most versatile cladding technology • Thickness niche is • Thickness niche is generally 2” and less • Only cladding process that can generally 6” and address both compatible and non- greater • Compatible metals compatible metals only • Compatible metals • Thickness sweet-spot is 1” to 6” only Explosive Metalworking 11
  13. 13. Key Demand Drivers for Explosion Welded Plates Corrosion Industrial CAPEX Explosive Metalworking 12
  14. 14. Explosion Clad - a Critical Weapon in the Battle Against Rust ! “…a major industry challenge is the ‘rust crisis’ in the global energy infrastructure” ! “Worldwide energy infrastructure too old” ! Most infrastructure “far beyond original design life” From presentation at 2009 Offshore Technology Conference Matthew Simmons, Chairman - Simmons & Company International Explosive Metalworking 13
  15. 15. Explosion Welding – a Key Step in Pre-fabrication Process Explosion Metal Suppliers Welding Fabricators MILLS & SERVICE CENTERS Sourced Metals End Users • Carbon Steel • Nickel Alloys • Titanium • Zirconium Explosive Metalworking 14
  16. 16. Selected End Markets Served by Explosion Welding Corrosion • Oil & Gas industry • Power generation • Petrochemicals / chemicals • Hydrometallurgy • Alternative energy • Industrial refrigeration Transition Joints • Aluminum production • Shipbuilding Above are several of the many industries that rely on explosion welding Explosive Metalworking 15
  17. 17. End Users Include Leading Players in Respective Fields Fabricators Morimatsu Group China End Users Chemicals Refinery Mining Engineering Explosive Metalworking 16
  18. 18. DMC’s Dominant Industry Position Protected by Significant Barriers to Entry " Global network of specialty-metals suppliers " Permits and shooting sites in U.S., France, Sweden & Germany " Mastery of explosion-welding process in large-scale production " Strong working relationships with end-market customers Explosive Metalworking 17
  19. 19. Oilfield Products Segment • Manufactures explosive perforating systems and seismic devices for the international oil & gas services industry • Growing presence in critical international energy markets • Recognized within industry for product and technology innovation • Extension of DMC’s expertise in specialized explosive manufacturing processes • Generated 13% of DMC sales in 2009 Oilfield Products 18
  20. 20. Explosive Perforating The Perforation Process 1. After a wellbore is drilled and the cement casing is in place, a perforating gun is deployed into the well 2. The gun is fired, sending steel projectiles through the casing and into the surrounding formation creating “perforation tunnels” 3. Oil or gas flows through perforation tunnels and into the well Oilfield Products 19
  21. 21. Financial Performance Review ($mm) 2006 2007 2008 2009 Sales $113.5 $165.2 $232.6 $164.9 % growth 43% 46% 41% (31%) Gross profit $42.0 $55.0 $70.8 $43.1 % margin 37% 33% 30% 26% Operating profit $30.1 $38.9 $38.1 $16.2 % margin 27% 24% 16% 10% Adjusted EBITDA $32.1 $43.5 $53.2 $26.8 % growth 86% 36% 22% (47%) Net income1 $19.3 $24.6 $24.1 $8.5 % growth 86% 28% (2%) (65%) EPS1 ($) $1.58 $2.00 $1.91 $0.66 % growth 84% 27% (5%) (65%) 1 Before discontinued operations 20
  22. 22. Balance Sheet Highlights (In thousands) Assets 2007 2008 2009 Cash, cash equivalents & restricted cash $ 9,416 $ 14,360 $ 22,411 Accounts receivables, net of allowance $ 39,833 $ 34,719 $ 25,807 Total current assets $ 94,730 $ 91,049 $ 87,974 Total assets $ 240,899 $ 229,586 $ 225,176 Liabilities Total current liabilities $ 58,818 $ 45,747 $ 42,135 Long-term debt $ 61,530 $ 46,178 $ 34,120 Total liabilities $ 142,620 $ 111,084 $ 93,065 Total stockholders’ equity $ 98,279 $ 118,502 $ 132,111 Total liabilities and stockholders’ equity $ 240,899 $ 229,586 $ 225,176 21
  23. 23. Supplemental Information 22
  24. 24. Sales and Explosion Welding Backlog Progression: Q1 2004 – Q4 2009 In millions 23
  25. 25. Capital Expenditures (in millions) Actual Forecast Explosive Metalworking 24
  26. 26. Progression of Adjusted EBITDA & Net Income (In millions) 25
  27. 27. Thank you. 26

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