Q4 2023 DMC Global Inc Earnings Call
Operator: www.dmc.gov.uk www.mooji.org www.dmc.gov.uk Subs by www.zeoranger.co.uk, Greetings. Welcome to the DMC Global fourth quarter and full year earnings conference. At this time, all participants are now listening. A 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.
Mmm.
[music].
Greetings welcome to the D M C global fourth quarter and full year earnings call. At this time, all participants on a listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operators since he's during the conference. Please press star zero on your telephone keypad.
Geoff High: I'll now turn the conference over to your host, Geoff High, VP of Investment Relations, may I begin? Hello and welcome to Dmc's fourth quarter conference call. Presenting today are Dmc CEO Michael 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.
Oh now turn the conference over to your host Jeff Hi.
V P as Investor Relations.
They begin.
Hello, and welcome to D. M C. As Fourthquarter conference call presenting today are D. M. C. C E O, Michael Cuda, 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 S. E C.
Our business is subject to certain risks that could cause actual results to differ materially from those anticipated and are forward looking statements D.
D. M. C assumes no obligation to update forward looking statements that become untrue because of subsequent events.
Geoff High: Today's earnings release and a related presentation on our fourth quarter performance are available on the investors page of our website, located at dmcglobal.com. A webcast replay of today's presentation will be available on our website shortly after the conclusion of this call. And with that, I'll now turn the call over to Michael Kuta.
Today's earnings release, an interrelated presentation on our fourth quarter performance are available on the investors page of our web site site located at D. M C Global Dot com.
[noise] webcast replay of today's presentation will be available at our website. Shortly after the conclusion of this call and with that I'll I'll turn the call over to Michael Cuda, Mike.
Michael Kuta: Hello, and thank you for joining us for today's call. Our 2023 fourth quarter closed out a pivotal year for DMC. Full year accomplishments included new records for several key financial metrics, including sales, adjusted EBITDA, and free cash flow. We also made key additions to DMC's leadership team and board of directors.
Hello, and thank you for joining us for today's call or 2023 fourth quarter closed out a pivotal year for D. M C.
Full year accomplishments included New records for several key financial metrics, including sales adjusted EBITDA in free cash flow we.
We also made key additions to Dnc's leadership team and board of directors, we enhance the operating strategies that are three business units, while also reducing costs across the organization.
Michael Kuta: We enhance the operating strategies of these three business units while also reducing costs across the organization. And we initiated a detailed review of our portfolio strategy as we seek to unlock long-term value for DMC stakeholders. Looking at the fourth quarter, our manufacturing businesses reported varying conditions in their industrial end markets. Arcadia, which serves the commercial and high-end residential building products market, reported a 9% year-over-year sales decline, which is due principally to lower aluminum prices. During the quarter, Arcadia completed the first phase of a paint capacity expansion, a key strategic objective. A second expansion is planned for the back half of this year. Current market conditions have led to a soft start to the year at Arcadia, but we believe results will improve throughout the balance of 2024. DynEnergetics, our oilfield products business, reported another strong quarter in its international market.
And we initiated a detailed review of our portfolio strategy as we seek to unlock longterm value for Dmt's stakeholders.
Looking at the fourth quarter or manufacturing businesses reported varying conditions in their industrial and markets.
Arcadia, which serves the commercial and high end residential building products market reported a 9% year over year sales decline, which.
Which is due principally to lower aluminum prices.
During the quarter Arcadia completed the first phase of a paint capacity expansion a key strategic objective Ah second expansion. This plan for the back half of this year.
Current market conditions have led to a soft start to the year to Arcadia, but we believe results will improve throughout the balance of 2024.
Dynaenergetics are oilfield products business reported another strong quarter and its international markets.
Michael Kuta: This solidified a new full-year record for international sales, which were up 28% versus 2022. In Dyna's North American market, fourth quarter unit sales of our flagship Dynastage system increased 4% sequentially. However, customer consolidation led to pricing pressure reducing our overall EBITDA margins to 12.3%. However, automation and operational excellence initiatives coming online in 2024 should improve Dyna's profitability. In addition, we expect new premium product offerings will support our margin improvement efforts. Dyna is working to ramp up production of its new Gravity 2.0 perforating system, which is the lightest, most compact self-orienting system on the market and is generating strong end-user demand.
This solidified a new full year record for international sales, which were up 28% versus 2022.
And Dinas North American market fourth quarter unit sales of our flagship diners stage system increased 4% sequentially.
However, customer consolidation led the pricing pressure, reducing our overall EBITDA margins to 12.3%.
Automation and operational excellence initiatives coming on line in 2024 should improve dinas profitability.
And Additionally, expect new premium product offerings will support our margin improvement efforts diners working to ramp up production of its new gravity two point of appropriating system, which is the lightest most compacts self orienting system on the market is generating strong end user demand.
Michael Kuta: Nobel Clatter's composite metals business delivered another outstanding quarter. Sales were up 33% year over year, and adjusted EBITDA margins came in at approximately 25%, reflecting a very favorable project. NobelCLAD continues to benefit from healthy activity in its global end market and is also capitalizing on strong demand and improved production capabilities for its Solyndra cryogenic transition. Last month, we formally announced our intent to simplify the DMC portfolio as part of a broader effort to enhance shareholder value. We are pursuing separate strategic alternatives for DynEnergetics and NovoClad with the help of our financial advisors.
Nobel Clatter composite metals business delivered another outstanding quarter sales were up 33% year over year and adjusted EBITDA margins came in at approximately 25%, reflecting a very a very favorite project mix.
Nobel Cloud continues to benefit from healthy activity and it's global and markets is also capitalizing on strong demand and improved production capabilities for its cylinder cryogenic transition joints.
Last month, we formally announced our intent to simplify the DNC portfolio as part of a broader effort to enhance shareholder value.
We are pursuing separate strategic alternatives or dynaenergetics and novo clad with the help of our financial advisors by.
Michael Kuta: By streamlining our portfolio, we can sharpen our focus on the growth and profitability of Arcadia, which benefits from a strong brand, a differentiated business model, and a large addressable market. We've also strengthened our capital structure and improved our financial flexibility as we embark on a broad range of growth opportunities at Arcadia. I'm excited about DMC's strategic direction and encouraged by our prospects for long-range growth. I'll now turn the call over to Eric for a closer look at our fourth-quarter financial results and a review of our guidance. Thanks, Mike.
By streamlining our portfolio, we can sharpen our focus on the growth and profitability of Arcadia, which benefits from a strong brand a differentiator business model and a large addressable market.
We've also strengthen our capital structure and improved our financial flexibility as we embark on a broad range of growth opportunities at Arcadia.
I'm excited about Dnc's strategic direction and encouraged by our prospects for long range growth.
I will now turn the call over to Eric for a closer look at our fourth quarter financial results in a review of our guidance Eric. Thanks.
Gerard J. Sweeney: Our consolidated fourth-quarter sales were $174 million, which was relatively flat with the fourth quarter last year. Consolidated gross margin was 26.1%, up 30 basis points from our 2022 fourth quarter due to a more favorable project mix at Nobleclad combined with margin recovery at Arcadia. Our fourth quarter SG&A expense of $27 million was 15.6% of sales, down from 17.5% in the fourth quarter of last year, driven mostly by lower litigation expenses and IT consulting fees at Dyna and Arcadia, respectively. It's important to note that our 2023 fourth quarter SG&A expense also includes $1 million of bad debt expense. Fourth quarter adjusted EBITDA attributable to Dmc remained flat year-over-year at $20 million, as improvements at Novoclad and Arcadia offset a decline at Dyna, inclusive of the Arcadia non-controlling interest.
Thanks, Mike are consolidated fourth quarter sales were $174 million, which is relatively flat with the fourth quarter last year.
Consolidated gross margin was 26.1% up 30 basis points from our 2022 fourth quarter due to a more favorable project mix and noble clad combined with margin recovery at Arcadia.
Our fourth quarter SG&A expanse of $27 million was 15.6% of sales down from 17.5% in the fourth quarter of last year.
Mostly by lower litigation expenses and consulting fees at diner in Arcadia, respectively.
It's important to note that our 2023 fourth quarter SG&A expense also includes $1 million a bad debt expense.
Fourth quarter adjusted EBITDA attributable to DNC remained flat year over year at $20 million as improvements and noble clad in Arcadia, offset a decline a diner.
Inclusive of the Arcadian Noncontrolling interest <unk>.
Gerard J. Sweeney: Consolidated Adjusted Evita was $23 million, or 13.4% of sales, up 60 basis points versus the prior year quarter. At the business level, Arcadia reported fourth quarter adjusted EBITDA of $9 million, of which $5 million, or 60%, was attributable to DMC. Compared with the prior year, Arcadia's adjusted EBITDA rose 29% and expanded 400 basis points as a percentage of sales. However, product pricing declined at a slower pace than the drop in aluminum costs, while SG&A also declined through lower ERP consulting fees and other miscellaneous costs. Dinah reported fourth quarter adjusted EBITDA of $9 million, or 12.3% of sales. Less favorable customer mix and lower absorption of manufacturing overhead costs led to a sequential and year-over-year margin contraction. Novoclad reported adjusted EBITDA of $8 million, which was 24.7% of sales and up 990 basis points compared to the fourth quarter of 2022.
Consolidated adjusted EBITDA was $23 million or 13.4% of sales up.
60 basis points versus the prior year quarter.
At the business level, Arcadia reported fourth quarter, adjusted EBITDA of $9 million.
Of which $5 million or 60% was attributable to DMC <unk>.
Compared with the prior year Arkady is adjusted EBITDA rose, 29% and expanded 400 basis points as a percentage of sales.
Arcadia is product pricing declined at a slower pace than the drop in aluminum costs, while SG&A also decline through lower ERP consulting fees and other miscellaneous costs.
[laughter] diner reported fourth quarter, adjusted EBITDA of $9 million or 12.3% of sales.
Less favorable customer mix and lower absorption of manufacturing overhead costs led to a sequential and year over year margin contraction.
<unk> reported adjusted EBITDA of $8 million, which was 24.7% of sales and up 990 basis points compared to the fourth quarter of 2022.
Gerard J. Sweeney: Even the margin improved due to a more favorable project mix and better absorption of fixed manufacturing overhead costs. Adjusted net income attributable to DMC was $5 million during the fourth quarter of 2023. Adjusted EPS attributable to DMC was $0.26, up 18% compared to last year's fourth quarter.
Even a margin improved due to a more favorable project mix and better absorption of fixed manufacturing overhead costs.
Adjusted net income charitable to DMC was $5 million during the fourth quarter of 2023.
Adjusted EPS attributable to DMC was 26 cents.
18% compared to last year's fourth quarter.
During the quarter DMC generated free cash flow of $15 million, which was an improvement of ever 10% compared with the prior year quarter.
We used fourth quarter free cash flow, primarily for principal payments on our long term debt distributions to Arcadia joint venture partner and an investment and marketable securities.
Gerard J. Sweeney: During the quarter, Dmc generated pre-cash flow of $15 million, which was an improvement of over 10% compared with the prior year quarter. We use fourth quarter free cash flow primarily for principal payments on our long-term debt, distributions to our Acadia joint venture partner, and an investment in marketable security. I should note that in this year's first quarter, we used our investments in marketable securities for de-levering following the closing of our new $300 million senior security credit facility. In terms of liquidity, we ended the fourth quarter with cash and marketable securities of $44 million and had no amounts outstanding under our $50 million revolver.
I should note that in this year's first quarter, we used our investments and marketable securities or Delevering. Following the closing of our new 300 million dollar senior secured credit facility.
In terms of liquidity, we ended the fourth quarter with cash and marketable securities of $44 million and had no amounts outstanding under our $50 million revolver.
Our debt to adjusted EBITDA leverage ratio was 1.25 at the end of the fourth quarter, which was well below our covenant threshold of 3.0.
On a pro forma net debt basis after subtracting cash and marketable securities are leverage ratio was 0.78 at the end of the fourth quarter, which represents the eighth court in a row that we have delivered.
Now turning to guidance for the first quarter of 2024 <unk>.
Consolidated sales are expected in a range of 168, two $178 million.
Gerard J. Sweeney: Our debt-to-adjusted EBITDA leverage ratio was 1.25 at the end of the fourth quarter, which was well below our covenant threshold of 3.0. On a pro forma net debt basis after subtracting cash and marketable securities, our leverage ratio was 0.78 at the end of the fourth quarter, which represents the eighth consecutive quarter in a row that we have de-leveraged. Now turning to guidance for the first quarter of 2024, consolidated sales are expected in a range of $168 to $178 million. As Mike mentioned, we expect market conditions in the first quarter to be soft in Arcadia's key markets, while the activity level in Dyna's North American markets is expected to slightly improve. First quarter adjusted EBITDA attributable to DMC is expected to be in a range of $15 to $20 million.
As Mike mentioned, we expect market conditions in the first quarter to be soft in Arcadia is key markets, while the activity level in Diana's North American markets are expected to slightly improve.
First quarter adjusted EBITDA attributable to DMC is expected to be in a range of $15 million to $20 million.
Katie and noble clouds, EBITDA margins are expected to moderate to level of similar to the prior year first quarter at diner, where we believe sequential comparisons are more relevant we anticipate EBIT margin scrolling through versus the fourth quarter due to higher sales volumes and lower bad that expense.
With that we're ready to take any questions from our analysts operator.
Okay. Thank you.
At this time, we will 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 have pushed starches she would like to remove your question for me.
Disappears using speaker equipment and may be necessary to pick up your handset before pressing the dis darkies.
Operator: Arcadia and Novoclad's EBITDA margins are expected to moderate to levels similar to the prior year first quarter. At Dyna, where we believe sequential comparisons are more relevant, we anticipate EBITDA margins will improve versus the fourth quarter due to higher sales volumes and lower bad debt expense. With that, we're ready to take any questions from our analysts. Operator?
Oh My first question has come from the lineup can human would keybanc capital markets.
Proceed with your question.
Hey, guys.
Hey, Ken Ken Ken.
Thanks for taking the questions.
My first one will be just on the the first quarter guide for Arcadia, you know, obviously, you're expecting that to be weaker here. Despite the prior year top eating sequentially from <unk>.
Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question.
Can you talk a little bit about how much of that is still the pricing that completely all of it any color on just wear volumes are within that business. An average finding what are you seeing from an underlying activity outside of pricing within that business.
Gerard J. Sweeney: If participants using speaker equipment, it may be necessary to pick up your handset. The Bulletproof Executive 2013, Our first questions come from the line of Ken Newman with KeyBank Capital Markets. Please proceed with your question. Hey, guys. Hey Ken, Ken, Ken?
Yeah, so pricing still a bit of a drag with aluminum costs. We're also seeing in the first quarter I think it's it's abating now but January it was challenged with weather. So we had.
Severe rain and flooding on the West coast, our core market. So that impacted January for sure volume is relatively steady we're seeing a bit of softness in our storefront business, but I think as we play out.
Michael Kuta: Thanks for taking the questions. I guess my first one will be just on the first quarter guide for Arcadia. You know, obviously, you're expecting that to be weaker here despite the prior year competition, www.dmc.gov. I'm just curious, can you talk a little bit about how much of that is still the pricing drag? Is that completely all of it? Any color on just where volumes are within that business and how they're trending? What are you seeing from an underlying activity outside of pricing in that? Yeah, so pricing is still a bit of a drag with aluminum costs. We're also seeing in the first quarter, I think it's abating now, but January was challenged with weather. So we had severe rain and flooding on the West Coast, our core markets. So that impacted January for sure. Volume is relatively steady.
The quarters to Q3 Q for Q, we're gonna see that strengthening we're also seeing our project business in outlook, there strengthening quite a bit and improving so.
It's a bit of it's a bit of a mixed bag. We also see.
<unk> in a bit of I'd say, a valley and we expect that to pick up throughout the year. So that's that's kind of the the premise behind the I guess, we call it 67% to 71 flattish with four Q.
Eric anything else, Okay, I think he had in mind.
Okay, and you talked about it a little bit here, but the follow up here is just.
What is the confidence of the comfort that margins improve in arkady after the first quarter and obviously.
Michael Kuta: We're seeing a bit of softness in our storefront business, but I think as we play out, The Quarters 2Q3Q4Q. We're going to see that strengthen. We're also seeing our project business and Outlook there strengthening quite a bit and improving. So it's a bit of a mixed bag. Resi's in a bit of a valley, and we expect that to pick up throughout the year. So that's kind of the premise behind the, I guess we'd call it 67 to 71, flatish with 4Q. Eric, anything else?
The revenue copies of it pretty significantly starting in the second quarter.
I'm, just hoping to take on how much the benefit from passing.
<unk> can can can you quantify that benefit here in 2024 versus you know all the other moving the pieces around you know, maybe it's a stabilizing a pricing or expectations for nothing you expect some volume improvement as we move through the year.
Yeah, I think the I think volume is gonna help as we go throughout the year I think.
Michael Kuta: Okay, I think you hit it, Mike. Yeah. Okay, and you touched on it a little bit here, but the follow-up here is... What is the confidence or the comfort that margins will improve in Arcadia after the first quarter? The revenue copies are pretty significantly increasing starting in the second quarter. I was hoping to dig into how much the benefit from the path of the expansion, quantify that benefit, www.globalonenessproject.org Stabilizing pricing or expectations for something you expect, some volume improvement as we move through the year. Yeah, I think the volume is going to help as we go throughout the year. I think, Q2, some of the project business. Again, there's some good project mix in there. There's some unfavorable project mix in there, too.
Q to some of the projects business again, that's there there are some good project mix in there there's some unfavorable project mix in there, but I think what.
We're gonna see is revert back to historical.
30% low thirties 30 per cent plus margins.
In Arcadia again.
It's a high variable cost business. So it's not.
Entirely volume driven Bud volume will help it as we step throughout the year and an increase in residential as well.
Got it maybe at one more before I jump back into the queue. The the free catalog vacation with you know with volumes being or what kind of being a little bit lighter here in the first quarter to start the year.
How do you think about working capital benefit and you know.
<unk>, how do they give out free cash flow converging beyond the first quarter.
Michael Kuta: But I think what we're going to see is revert back to the historical 30 percent, low 30s, 30 percent plus margins in Arcadia. Again, it's a high variable cost business, so it's not entirely volume driven, but volume will help it as we go throughout the year and an increase in residential as well. Got it. Maybe one more before I jump back.
Yeah, Ken this is Eric so.
For 2023, we had free cash flow conversion of 40% to 45%.
And this year, we're aiming to get that up into the call at low 50% low to mid 50% level. We do think that there's gonna be some tailwinds from working capital. We think that they are working capital actually was slightly higher and a couple of the businesses in 2023 then.
Gerard J. Sweeney: The Free Cash Flow Expectations, with, you know, volume being or with sales kind of being a little bit lighter here in the first quarter to start the year. How do you think about working capital benefit? Any sense on how you think about free cash flow conversion beyond the first quarter? Yeah, Ken, this is Eric.
Maybe what they needed so as we go forward in 2024, we think we're going to be able to unwind some of that and get a benefit the free cash the line.
Understood.
Okay. Thank you.
Our next question comes from the lineup Alex.
Offer with Stifel. Please proceed with your question.
Alright, Thanks, a good afternoon.
Good afternoon, everyone and thanks for taking my question.
Gerard J. Sweeney: So for 2023, we had a free cash flow conversion of, you know, 40 to 45%. And this year, we're aiming to get that up into the, you know, call it a low 50%, low to mid 50% level. We do think that there's going to be some tailwinds from working capital. We think that working capital actually was slightly higher in a couple of businesses in 2023 than maybe they needed. So as we go forward, in 2024, we think we're going to be able to unwind some of that and get a benefit on the free cash flow line. Thank you. Our next question comes from the line of Alec. Please proceed with your, Thanks, and good afternoon everyone, and thanks for taking my question. Hi Alec.
Hi, there.
Can you just started soccer I was wondering if you could provide just an update on the competitive landscape into perforating business or any kind of color. You can provide on pricing is trained and give me some of the consolidation you've seen in the market and North America and yeah, just some color and that it would be great.
Yeah, So we've seen some pricing pressure from consolidation in.
In the market so that that's been a driver to margins I think we're we're we're seeing that and that's that's ahead of some of the initiatives we have on on margin improvement. So.
We're putting in a lot of automation here in the first and second quarter, that's going to drive better margins.
Alec: Hi, so just to start us off here, I was wondering if you could provide just an update on the competitive landscape in the perforating business and any kind of color you could provide on how pricing is trending, given some of the consolidation we've seen in the market in North America. And yeah, just some color around that would be great. Yeah, so we've seen some pricing pressure from consolidation in the market. So, you know, that's been a driver of margins. I think we're, we're seeing that.
And quite frankly, better performance of our perfect gun systems. We've also got quite a bit of a ci operational excellence issued is cost out.
We're implementing this year, that's gonna drive margins and quite frankly also.
Some new tech in our gun systems improve.
Improved product mix that is also going to I think are going to drive improvements there as well. So I think we're seeing a pretty good market out of the gate here in January and in the first quarter and so we expect improvements off of <unk>.
Michael Kuta: And that's ahead of some of the initiatives we have on margin improvement. So we're putting in a lot of automation here in the first and second quarter that's going to drive better margins and, quite frankly, better performance of our perf gun systems. We've also got quite a bit of CI operational excellence initiatives costed out that we're implementing this year.
And we should see better or much better profiles, we'd go throughout the year.
Great. Thank you for that and then just shifting gears to our Katie I was just wondering if you could provide some additional color on the outlook for the business. Just curious in the past you you mentioned and kind of going after small hanging fruit and growing the business organically Nicaea Capex I'm looking correctly for 24 us up a little bit sequentially I'm wondering.
Michael Kuta: That's going to drive margins and, quite frankly, also some new tech in our gun systems, and improved product mix that is also going to, I think, drive improvements there as well. So I think we're seeing a pretty good market out of the gate here in January and in the first quarter. And, you know, so we expect improvements from 4Q and, you know, we should see a much better profile as we go throughout the year. Great, thank you for that.
If that's just speaking to some of that organic growth or if there is any inorganic that you'd only after as well.
Yeah. So I'd start on the organic side I mean, some of some of its best G&A and people investment we've gotta pull through more work on our commercial interiors business in Arcadia custom business, which is the luxury residential side of our business you know that.
The predominant business in Arcadia, as a commercial exteriors low rise storefront.
Michael Kuta: And then just shifting gears to Arcadia, I was just wondering if you could provide some additional color on the outlook for the business. Just curious. In the past, you mentioned kind of going after small hanging fruit and growing the business organically. And I see the CapEx, if I'm looking correctly, for 24s up a little bit sequentially. I'm wondering if that's, Speaking to some of that organic growth, if there's any inorganic that you're going after as well. Yeah, so I'd start on the organic side.
And.
So I think that's going to be part of it I think on the Capex side, some additional investments and paint.
As well as Anna Dicing aren't Gonna drive both volume.
As well as a margin as we outsource some of our Anodize thing now.
Got it that's great and actually if I could squeeze one more and shifting back to Diana I, just <unk> I know you mentioned some automation. Some other initiatives you guys on the margin front I was just curious it so that businesses are.
Michael Kuta: I mean, some of the some of it's SG&A and people investment; we've got to pull through more on our commercial interiors business and Arcadia custom business, which is the luxury residential side of our business. You know, the predominant business in Arcadia is commercial exteriors, low-rise storefront, and uh, so I think that's going to be part of it. I think on the CapEx side, some additional investments in paint as well as anodizing are going to drive both volume as well as margin as we outsource some of our anodizing now. That's great!
Are you expecting any kind of growth given the business in the U S is activities relatively flatter how should we connect to think about that.
On a margin standpoint.
Yeah. So I think what we're expecting is.
Fairly sizable.
Growth in the international business. So we exited 2023 record international sales, we have a record backlog internationally. So we will see growth there.
North America.
We didn't provide full year guidance, but it's off to a good start I'd say, but I wouldn't I wouldn't or put a bunch of growth into the North America side, probably more on the flatter side, Eric would you Yeah I would think that you just to augment what micros, saying I think as you think about the the revenue trajectory that business I think it's <unk>.
Michael Kuta: And actually, if I could squeeze one more in, shifting back to Dinah, I know you mentioned some automation, some other initiatives you have on the margin front. I'm just curious, for that business, are you factoring any kind of growth in the business in the U.S. if activity is relatively flat, or how should we kind of think about that from a margin standpoint?
Gonna be relatively flattish kind of going forward, but when you Peel it back and look at the domestic versus international components, there's going to be a bit of a mix there like Mike said, the international peace, where feel pretty confident about they're showing a lot of upward.
Growth there, but the north American market is probably going to be a bit flattish.
Michael Kuta: Yeah, so I think what we're expecting is fairly sizable growth in the international business. So we exited 2023 with record international sales. We have a record backlog internationally, so we'll see growth there. North America, you know; we didn't provide full-year guidance, but it's off to a good start, I'd say. But I wouldn't put a lot of growth into the North America side, probably more on the flatter side. Eric, would you?
Maybe a little bit more sluggish than in years past.
Again, the international pieces also part of what's driving the margins as well so.
That's a business that.
Should outperform for us in 2024.
Got it that's a great color and with that I'll turn it back. Thank you.
Thank you and just as a reminder, if anyone has any questions. You May press star one on your telephone keypad to join the question and answer Q.
Gerard J. Sweeney: Yeah, I would agree. Just to augment what Mike was saying, I think as you think about the revenue trajectory of that business, I think it's going to be relatively flattish kind of going forward. But when you peel it back and look at the domestic versus international components, there's going to be a bit of a mix there. Like Mike said, the international piece we feel pretty confident about; they're showing a lot of upward growth there. But the North American market is probably going to be flattish, maybe a little bit more sluggish than in years past. And again, the international piece is also part of what's driving the margins as well.
And it looks nice we have reached the end of the question and answer session and on that I'll turn the call back over to Michael Okuda for closing remarks.
Thank you again for joining today's call. We appreciate your interest in DMC and look forward to updating you and may following our first quarter.
And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
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Gerard J. Sweeney: So, you know, that's a business that should outperform for us in 2024. Got it. That's great, Keller.
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Uh-huh.
Michael Kuta: With that, I'll turn it back. Thank you. And just as a reminder, if anyone has any questions, you may press star one on your telephone keypad to take part in the questionnaire. And it looks like we have reached the end of the question and answer session. And I'll now turn the call back over to Michael Kuta for a closing. Thank you again for joining today's call. We appreciate your interest in DMC and look forward to updating you in May following our first quarter. And this concludes today's conference, and you may disconnect your lines.
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Operator: Thank you for your participation, www.globalonenessproject.org www.dmc.gov.uk www.dmc.gov.au www.dmc.gov.uk www.microsoft.com.ca www.dmc.gov.uk www.mooji.org The Ultimate Parody Site! www.dmc.gov.uk www.globalonenessproject.org BF-WATCH TV 2021, www.dmc.gov.uk www.dmc.gov BF-WATCH TV 2021, www.dmc.gov.au, Thanks for watching. Stay safe and stay healthy, www.dmc.gov.uk
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[noise].
Mhm.
Mmm.
[noise].