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STRATEGIC REVIEW EXPENSES
 12 Months Ended
Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
STRATEGIC REVIEW EXPENSES STOCKHOLDERS' EQUITY AND EMPLOYEE STOCK PLANS
  
Employee stock plans

Our stock-based compensation expense results from restricted stock awards ("RSAs"), restricted stock units ("RSUs"), performance share units ("PSUs"), and stock issued under the Employee Stock Purchase Plan. The following table sets forth the total stock-based compensation expense included in the Consolidated Statements of Operations for the years ended December 31:
 
 202420232022
Cost of products sold$322 $430 $506 
General and administrative expenses5,413 8,583 8,304 
Selling and distribution expenses795 1,102 1,248 
Strategic review expenses372 — — 
Restructuring expenses, net and asset impairments— 155 — 
Stock-based compensation6,902 10,270 10,058 
Income tax benefit(1,380)(3,104)(1,716)
Stock-based compensation, net of income taxes5,522 7,166 8,342 
Earnings per share impact   
Basic$0.28 $0.37 $0.43 
Diluted$0.28 $0.37 $0.43 
 
On November 4, 2016, our stockholders approved the 2016 Omnibus Incentive Plan (“2016 Plan”). The 2016 Plan provides for the granting of various types of equity-based incentives, including stock options, RSAs, RSUs, stock appreciation rights, performance shares, performance units, other stock-based awards, and cash-based awards. Our stockholders approved a total of 5,000,000 shares available for grant under the 2016 Plan, less 1,639,881 of RSAs and RSUs previously granted under the 2006 Stock Incentive Plan ("2006 Plan") as of the 2006 Plan's expiration on September 21, 2016. As of the inception of the 2016 Plan, 3,360,119 shares were available for grant under the 2016 Plan. As of December 31, 2024, there are 1,124,448 shares available for future grant.

RSAs and RSUs are granted to employees and non-employee directors based on time-vesting. For RSAs or RSUs granted to employees, vesting typically occurs in one-third increments on the first, second, and third anniversary of the grant date. For RSAs or RSUs granted to non-employee directors, vesting occurs on the first anniversary of the grant date. Each RSA represents a restricted share of common stock that has voting and dividend rights and becomes fully unrestricted upon vesting. Each RSU represents the right to receive one share of stock upon vesting.

The fair value of RSAs and RSUs granted to employees and non-employee directors is based on the fair value of DMC’s stock on the grant date. RSAs and RSUs granted to employees and non-employee directors are amortized to compensation expense over the vesting period on a straight-line basis. Our policy is to recognize forfeitures of RSAs and RSUs as they occur.

Prior to 2024, PSUs were granted to employees with vesting based on performance and market conditions. In 2024, PSUs were granted to employees with vesting based solely on market conditions. Each PSU represents the right to receive stock upon the achievement of certain conditions. A target number of PSUs is awarded on the grant date, and the recipient is eligible to earn shares of common stock between 0% and 200% of the number of targeted PSUs awarded. The PSUs earned, if any, cliff vest at the end of the third year following the year of grant based on the degree of satisfaction of the PSU conditions.

For PSUs granted prior to 2024, a portion of an employee's grant is based on actual performance against a target Adjusted EBITDA goal while the remainder is based on the Company's relative total shareholder return ("TSR") performance compared to the peer group disclosed in our Proxy Statement. 25% of the PSU grant is based on the achievement of targeted Adjusted EBITDA and 75% of the PSU grant is based on the achievement of relative TSR performance. For PSUs granted in 2024, 100% of the employee's grant is based on the Company's relative TSR performance compared to the S&P SmallCap 600 Industrials index.

The fair value of PSUs with target Adjusted EBITDA performance conditions is based on the fair value of DMC’s stock on the grant date, and the value is amortized to compensation expense over the vesting period and is adjusted based on the estimated probable satisfaction of the performance condition at the end of each reporting period. The fair value of PSUs with TSR performance conditions is based on a third-party valuation simulating a range of possible TSR outcomes over the performance period, and the resulting fair value is amortized to compensation expense over the vesting period on a straight-line basis. Our policy is to recognize forfeitures of PSUs as they occur.
A summary of the activity of our unvested RSAs issued under the 2016 Plan is as follows:
2016 Plan
SharesWeighted Average
Grant Date
Fair Value
Balance at December 31, 2022273,777 $32.71 
Granted260,207 20.79 
Vested(243,592)30.97 
Forfeited(8,439)27.20 
Balance at December 31, 2023281,953 $23.38 
Granted602,442 13.15 
Vested(233,941)22.18 
Forfeited(120,478)18.16 
Balance at December 31, 2024529,976 $13.47 

A summary of the activity of our unvested RSUs issued under the 2016 Plan is as follows:
2016 Plan
SharesWeighted Average
Grant Date
Fair Value
Balance at December 31, 202244,521 $39.47 
Granted31,418 21.18 
Vested(21,968)40.69 
Forfeited— — 
Balance at December 31, 202353,971 $28.33 
Granted39,870 17.52 
Vested(23,796)34.96 
Forfeited— — 
Balance at December 31, 202470,045 $19.92 

A summary of the activity of our unvested PSUs issued under the 2016 Plan is as follows:
SharesWeighted Average
Grant Date
Fair Value
Balance at December 31, 2022144,732 $51.67 
Granted75,997 28.30 
Vested(42,883)15.48 
Forfeited(87,374)67.79 
Balance at December 31, 202390,472 $33.62 
Granted154,789 24.55 
Vested(2,616)67.78 
Forfeited(87,989)27.17 
Balance at December 31, 2024154,656 $27.63 
As of December 31, 2024, total unrecognized stock-based compensation related to unvested awards was as follows:
Unrecognized stock compensationWeighted-average recognition period
Unvested RSAs$4,565 1.3 years
Unvested RSUs$813 1.7 years
Unvested PSUs$1,327 1.5 years
 
Stockholders Protection Rights Agreement

On June 5, 2024, the Board adopted the Rights Agreement and declared a dividend of one Right for each share of the Company’s common stock outstanding at the close of business on June 17, 2024. One Right will also be issued together with each share of common stock issued by the Company after that date, but before the Separation Time (as defined in the Rights Agreement). Each Right initially represents the right to purchase one one-thousandth (0.001) of a share of Series B Participating Preferred Stock for $75.00, subject to adjustment and upon such terms and subject to the conditions set forth in the Rights Agreement. Rights will generally become exercisable if any person (or any persons acting as a group) acquires “Beneficial Ownership” (as defined in the Rights Agreement) of 10%, or 20% in the case of certain passive investors, or more of the Company’s outstanding common stock. If Rights become exercisable, all holders of Rights (other than the person, entity or group triggering the Rights Agreement, whose rights will become void and will not be exercisable) will have the right to purchase from the Company for $75.00, subject to certain potential adjustments, shares of the Company’s common stock having a market value of twice that amount.

The Rights Agreement expires on June 4, 2025, unless earlier terminated or the Rights are redeemed or exchanged by the Board. There is currently no impact on the Company’s Consolidated Financial Statements.

The Company’s Certificate of Incorporation authorizes the issuance of preferred stock. However, as of December 31, 2024, no preferred stock has been issued.
STRATEGIC REVIEW EXPENSES
In January 2024, the Company announced that the Board had initiated a review of strategic alternatives for the DynaEnergetics and NobelClad segments. In conjunction with the Board’s consideration of various strategic, business, and financial alternatives, during the year ended December 31, 2024, the Company incurred expenses of $7,765, which primarily included $4,076 in professional service fees and $2,988 in employee retention compensation, including $372 of stock-based compensation.

In October 2024, the Company announced that the Board was no longer actively marketing the DynaEnergetics and NobelClad segments.