• Full Year Revenue: $729.6 million, a 3.4% increase over 2023.
• Adjusted EBITDA: $82.5 million, up 25.3% from the prior year.
• Operating Income: $39.8 million for the full year 2024, highest since 2016.
• Net Income: $19 million or $0.60 per diluted share for the year ended December 31, 2024.
• Free Cash Flow: $27.1 million for full year 2024, compared to $3.1 million in the prior year.
• Gross Profit Margin: Increased to 29.2%, up 30 basis points from the prior year.
• SG&A Expenses: $156.4 million, down 6.2% from 2023.
• Interest Expense: $3.9 million for the fourth quarter, down from $4.7 million in the prior year quarter.
• Effective Income Tax Rate: 21.8% for the full year 2024.
• Gross Debt: $169.6 million as of December 31, 2024, a decrease of $20.8 million from the prior year.
• International Segment Revenue: $35 million in Q4 2024, up 3.6% from the prior year.
• Products and Systems Segment Revenue: $13.7 million in 2024, a 5.2% increase from 2023.

• Warning! GuruFocus has detected 5 Warning Signs with NNBR.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• MISTRAS Group Inc (NYSE:MG) exceeded its revised annual guidance for 2024, with significant bottom-line expansion.
• Revenue increased across all reported segments and industries, demonstrating market diversification.
• Adjusted EBITDA rose by over 25% compared to the previous year, with a 200 basis point margin expansion.
• The company achieved its highest EBITDA margin and operating income since 2016.
• MISTRAS Group Inc (NYSE:MG) successfully reduced SG&A expenses to the lowest level in over five years, enhancing operating leverage.

Negative Points

• The North American segment experienced a 7.5% revenue decline in Q4 2024, primarily due to a decrease in the midstream industry.
• Gross profit margin for the North American segment decreased by 600 basis points due to sales mix changes.
• Data analytics solutions revenue was down in 2024 due to project timing and implementation delays.
• The company is facing uncertainties related to foreign tariffs and exchange rates, impacting future guidance.
• The oil and gas segment has been down for three consecutive quarters, with midstream experiencing project delays.

Q & A Highlights

Q: Natalia, what feedback have you received from customers about Mistras, and what improvements do they suggest? A: Natalia Shuman-Fabbri, President and CEO, stated that customers are very positive and excited about Mistras' comprehensive offerings, including software analytics, engineering services, testing, and inspection. Customers see significant value in these offerings.

Q: Is the receivable issue from the past fully resolved, or are there still contracts that need repricing? A: Edward Prajzner, CFO, confirmed that the receivable issue is well under control, and they feel confident heading into 2025.

Q: What are your expectations for the upcoming turnaround season compared to last year's strong first half? A: Edward Prajzner, CFO, explained that 2025 is expected to be a normalized year for turnarounds. The spring season will be weaker, while the fall will be more robust, opposite to 2024's pattern.

Q: Can you provide an update on the data analytics segment, particularly regarding delays and growth expectations? A: Natalia Shuman-Fabbri, President and CEO, acknowledged that revenue was down in 2024 due to project timing and implementation delays. However, investments are ongoing, and growth is anticipated in 2025, especially with the PCMS software in demand.

Q: How are tariffs affecting your business, and why is guidance not being provided yet? A: Manuel Stamatakis, Chairman and Interim CEO, mentioned that the impact of tariffs is still being assessed, and guidance will be released once the new CEO, Natalia, has reviewed all business lines. The delay is not solely due to tariffs.

Q: What is happening in the midstream oil and gas business, given the recent declines? A: Natalia Shuman-Fabbri, President and CEO, noted that project delays affected midstream in 2024, but growth is expected in 2025 due to regulatory changes and increased demand for advanced inspection technologies.

Q: Can you elaborate on the data analytics strategy, given the recent sales decline? A: Natalia Shuman-Fabbri, President and CEO, stated that there are no strategic changes. The focus remains on collaborative sales efforts and extending market share beyond the oil and gas industry.

Q: Is the fourth quarter SG&A level sustainable, or were there one-time factors? A: Edward Prajzner, CFO, confirmed that the fourth quarter SG&A level is a good base for future modeling, reflecting disciplined cost control measures.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.