Del Monte Corporation

DMC reported second-quarter consolidated sales of $157 million, at the high end of its forecasted range, and adjusted EBITDA attributable to DMC of $10.7 million, above the high end of the range. Adjusted net income attributable to DMC was $727 thousand, or $0.04 per diluted share. Arcadia’s adjusted EBITDA margin before NCI was 13.6%, up from 10.9% a year ago and 6.9% in the first quarter; DynaEnergetics’ adjusted EBITDA margin was 8.4%, down from 13.4% last year but up from 4.6% in the prior quarter, helped by a $1.5 million tariff refund; NobelClad’s adjusted EBITDA margin was 13.7%, down from 16.5% a year ago and up from 9.8% in the first quarter. SG&A was $24.5 million, or 15.6% of sales, versus 16.8% a year ago and 18.1% in the first quarter. Cash and cash equivalents were $28.6 million, net debt was $30.5 million, and net cash used in operations was $8 million. For the third quarter, management guided to sales of $158 million to $168 million and adjusted EBITDA attributable to DMC of $10 million to $13 million. The guidance assumes steady performance at Arcadia, more well completion activity at DynaEnergetics, and higher shipments at NobelClad, and it does not include further tariff refunds.

Jim O’Leary said the quarter showed meaningful progress despite weak end markets, especially at Arcadia, where management focused on restoring supply-chain stability, customer service, and leadership continuity. He emphasized that Arcadia’s short-cycle storefront business is recovering even though commercial construction remains “absolutely horrible,” and said the company has likely regained much of the share it can win without participating in aggressive low-end pricing. On DynaEnergetics, he said the business could benefit from improved well-completion activity and a new geothermal opportunity, but pricing remains difficult.

Eric Walter highlighted consolidated adjusted EBITDA margin improvement at Arcadia and DynaEnergetics, citing Arcadia’s 13.6% margin versus 10.9% a year ago and DynaEnergetics’ 8.4% margin, which benefited from a $1.5 million tariff refund. He also noted SG&A improved to $24.5 million, or 15.6% of sales, from 16.8% a year ago, but net debt rose to $30.5 million from $18.7 million at year-end because of higher borrowings to fund working capital, while operating cash flow used $8 million. For guidance, he said the third quarter assumes no tariff refunds and flagged risks from Middle East disruptions, aluminum volatility, tariffs, and weaker end markets.

Analysts focused on whether Arcadia had fully recaptured lost business from prior supply-chain issues, and management said a substantial amount has returned, though some share is still being affected by aluminum costs and aggressive competitor pricing. Questions also centered on DynaEnergetics’ activity outlook, competitive pricing, and the potential size of the geothermal opportunity; management said the market is still early, competitors remain highly price-competitive, and geothermal is too nascent to size confidently, though DMC sees itself as a technology leader. A separate topic was the Arcadia put/call option, and management explained that September 6 is the first exercisable date, clarified the 19.9% voting cap and shareholder approval requirement above that level, and stressed that any preferred-share redemption depends on legally available funds and board approval.