Revenue Performance - Revenue for the three months ended March 31, 2025, was $161.6 million, a decrease of $22.8 million, or 12.4%, compared to $184.4 million in the same period of 2024[142]. - North America segment revenue decreased by 14.3% to $128.9 million, primarily due to a decline in the Oil and Gas market revenue[144]. - International segment revenue increased by 0.5% to $33.2 million, driven by low double-digit organic growth and favorable foreign exchange impacts[144]. - Products and Systems segment revenue decreased by 3.7% to $3.1 million, attributed to decreased sales volume and shipments[144]. - Total revenue for the three months ended March 31, 2025, was $161.6 million, a decrease of 12.4% compared to $184.4 million in the same period of 2024[148]. - Field Services revenue decreased by $16.2 million, primarily due to reduced sales volume in oil and gas, industrials, and infrastructure markets[149]. - Oil and gas customer revenue accounted for approximately 60% of total revenue in both the three months ended March 31, 2025, and 2024[145]. - The top ten customers represented approximately 37% of total revenue for the three months ended March 31, 2025, down from 39% in the prior year[145]. - Oil and gas revenue by sub-category showed a total decrease from $113.2 million in 2024 to $96.6 million in 2025, with upstream, midstream, and downstream revenues decreasing by 4%, 26%, and 19% respectively[147]. Financial Position - The company's cash balance as of March 31, 2025, was approximately $18.5 million, indicating strong liquidity[132]. - As of March 31, 2025, cash and cash equivalents totaled $18.5 million, with $114.0 million of unused commitments under the Credit Agreement[169]. - Cash provided by operating activities was $5.6 million, representing a year-on-year increase of $5.0 million, or 835%[165]. - Interest expense decreased to approximately $3.3 million in Q1 2025 from $4.4 million in Q1 2024 due to lower overall borrowings[160]. - The company was in compliance with the terms of the Credit Agreement as of March 31, 2025, and will continue to monitor compliance with covenants[170]. Profitability and Expenses - Gross profit decreased by $5.3 million, or 11.4%, with a gross profit margin of 25.3% for Q1 2025 compared to 25.0% in Q1 2024[153][155]. - Operating expenses increased by $1.3 million, or 3.2%, with selling, general and administrative expenses decreasing by $0.6 million due to cost discipline[157]. - Income from operations (GAAP) for Q1 2025 was a loss of $1.0 million, a decrease of $6.6 million compared to income of $5.6 million in Q1 2024[159]. Strategic Initiatives - The company continues to focus on integrating asset protection solutions through its OneSuite platform, which offers over 90 applications in a centralized environment[131]. - The company has made numerous acquisitions to expand its service lines and geographical reach, enhancing its competitive advantages[129]. Taxation - The effective income tax rate increased to approximately 26.9% in Q1 2025 from 10.6% in Q1 2024, primarily due to the impact of favorable discrete items related to stock compensation[161][162].

Financial Data and Key Metrics Changes - Revenue decreased by over 12% year over year, primarily due to market uncertainty, with a notable decline of $16.6 million in the oil and gas end market [10][11] - The company reported a GAAP net loss of $3.2 million or $0.10 per share, while the non-GAAP net loss was $0.01 per share for the first quarter [17] - Adjusted EBITDA decreased by $4.2 million to $12 million, marking the second highest first quarter adjusted EBITDA performance in the last five years [17] - Net cash provided by operating activities increased by $5 million to $5.6 million compared to the first quarter of the previous year [18] Business Line Data and Key Metrics Changes - The oil and gas end market experienced the largest revenue decline, particularly in the downstream sector, attributed to timing of turnarounds and project delays [10][11] - Aerospace and defense end market saw a revenue decline of $1.7 million due to macroeconomic uncertainties and supply chain disruptions [11] - The Data Solutions Group, particularly the PCMS offering, achieved a revenue growth of 6% compared to the prior year [13] Market Data and Key Metrics Changes - The international segment revenue grew nearly 4% in local currency, although this was offset by adverse foreign exchange translation [15] - The company noted a reduction in customer spending and project pushouts in upstream and midstream sub-industries due to market uncertainties [11] Company Strategy and Development Direction - The company is focusing on three key initiatives: leadership talent evaluation, recalibration of cost base, and developing growth strategies across all businesses [6] - Mistras is emphasizing accelerated expansion in core end markets like oil and gas and aerospace and defense, with a focus on integrated solutions leveraging data analytics [8][10] - The launch of the Mistras Data Solution brand consolidates data-centric services and technologies, aiming to enhance operations for asset-intensive end markets [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of the year despite a slower start in key markets, with expectations of recovering revenue in the oil and gas sector [12][23] - The company is closely monitoring potential industry headwinds caused by global market uncertainties and tariffs [12][22] - Management anticipates that adjusted EBITDA for 2025 will at least meet or exceed the levels achieved in 2024 [23] Other Important Information - The company is not providing full-year guidance for fiscal 2025 due to unprecedented market uncertainty [22] - The effective tax rate for the first quarter was 26.9%, with an anticipated rate of approximately 25% for the full year [19] Q&A Session Summary Question: Changes in the operating environment compared to three months ago - Management noted unprecedented uncertainty affecting project delays and customer evaluations regarding tariffs [33] Question: Impact of tariffs on business and customer decisions - The direct impact of tariffs on Mistras is minimal, but customers are experiencing delays in spending due to economic conditions [44][49] Question: Pricing initiatives and discussions with customers - The company is maintaining commercial discipline and reviewing contract economics to ensure fair ROI for services [38] Question: Outlook for international growth - International revenue grew about 4% organically, with a diversified business model reducing variability compared to North America [65] Question: Expectations for midstream and downstream markets - Demand is expected to remain stable, but current uncertainties may affect short-term performance [68] Question: Revenue recovery expectations in the oil and gas sector - The company expects to recover $6.5 million in revenue from turnarounds in the second half of the year [78]

Financial Data and Key Metrics Changes - Revenue decreased by over 12% year-over-year, primarily due to market uncertainty, with a notable decline of $16.6 million in the oil and gas end market [10][11] - The company reported a GAAP net loss of $3.2 million or $0.10 per share, while the non-GAAP net loss was $0.01 per share for the first quarter [18] - Adjusted EBITDA decreased by $4.2 million to $12 million, marking the second highest first quarter adjusted EBITDA performance in the last five years [18] - Net cash provided by operating activities was $5.6 million, an increase of $5 million compared to the prior year [19] Business Line Data and Key Metrics Changes - The oil and gas end market experienced the largest revenue decline, particularly in the downstream sector, attributed to timing of turnarounds and project delays [10][11] - Aerospace and defense revenue declined by $1.7 million due to macroeconomic uncertainties and supply chain disruptions [11][12] - The Data Solutions Group, particularly the PCMS offering, saw a revenue growth of 6% compared to the prior year [13] Market Data and Key Metrics Changes - The international segment revenue increased by nearly 4% in local currency, although this was offset by adverse foreign exchange translation [16] - The company noted a reduction in customer spending and project pushouts in upstream and midstream sub-industries due to market uncertainties [11] Company Strategy and Development Direction - The company is focusing on three key initiatives: leadership talent evaluation, recalibration of cost base, and developing growth strategies across all businesses [6][7] - Mistras is emphasizing accelerated expansion in core end markets like oil and gas and aerospace and defense, with a focus on integrated solutions leveraging data analytics [7][9] - The launch of the Mistras Data Solution brand consolidates data-centric services and technologies, aiming to enhance operations for asset-intensive end markets [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of the year despite a slower start in key markets, with expectations of recovering revenue in the oil and gas sector [11][12] - The company is closely monitoring potential industry headwinds caused by global market uncertainties and tariffs [12][23] - Management anticipates that adjusted EBITDA for 2025 will at least meet or exceed the levels achieved in 2024 [24] Other Important Information - The company is not providing full-year guidance for fiscal 2025 due to unprecedented market uncertainty [23] - The effective tax rate for the first quarter was a tax benefit of 26.9%, with an anticipated rate of approximately 25% for the full year [20] Q&A Session Summary Question: Changes in the operating environment compared to three months ago - Management noted unprecedented uncertainty affecting project delays and customer evaluations regarding tariffs [33][34] Question: Impact of tariffs on business and project delays - The direct impact of tariffs on Mistras is minimal, but customers are pausing or delaying spending due to economic conditions [42] Question: Pricing initiatives and customer discussions - The company is maintaining commercial discipline and reviewing contract economics to ensure fair ROI for services [37][38] Question: Outlook on midstream and downstream markets - Revenue reduction in midstream is attributed to budget restrictions and regulatory drivers, with expectations of demand recovery later in the year [53] Question: Expectations for revenue and EBITDA - Management indicated that adjusted EBITDA is expected to be similar to last year, suggesting that revenue may not be significantly lower than the previous year [55][56]

Financial Performance - Q1 2025 revenue was $161.6 million, compared to $184.4 million in Q1 2024[34] - Gross profit for Q1 2025 was $40.9 million, with a gross margin of 25.3%[36] - Adjusted EBITDA for Q1 2025 was $12.0 million[36] - Net loss for Q1 2025 was $3.2 million, compared to a net income of $1.0 million in Q1 2024[36] - Net cash provided by operating activities was $5.6 million in Q1 2025[39] - Free cash flow was -$0.2 million in Q1 2025[39] Strategic Initiatives - MISTRAS officially launched the MISTRAS Data Solutions brand, consolidating data-centric services, software, and technologies[8] - The company is focusing on integrated solutions and leveraging data analytics and monitoring technologies[8] - MISTRAS is emphasizing technology-enabled asset integrity solutions[16] Market Segments - Oil & Gas revenue totaled $96.6 million in Q1 2025, with Upstream contributing $40.3 million (41.7%), Midstream $15.8 million (16.4%), and Downstream $40.5 million (41.9%)[14] - Aerospace & Defense revenue was $20.4 million in Q1 2025[34] - Industrials revenue was $18.6 million in Q1 2025[34]

Company Performance - Mistras reported a quarterly loss of $0.01 per share, missing the Zacks Consensus Estimate of $0.16, and compared to earnings of $0.07 per share a year ago, representing an earnings surprise of -106.25% [1] - The company posted revenues of $161.62 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 10.48%, and down from $184.44 million year-over-year [2] - Over the last four quarters, Mistras has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Market Performance - Mistras shares have increased by approximately 5.9% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The current consensus EPS estimate for the coming quarter is $0.24 on revenues of $187.36 million, and for the current fiscal year, it is $0.83 on revenues of $747.59 million [7] Industry Outlook - The Zacks Industry Rank for Electronics - Miscellaneous Products is currently in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

MISTRAS First Quarter 2025 Results [Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) MISTRAS Group reported a 12.4% revenue decline in Q1 2025, improving gross margin and achieving positive operating cash flow Q1 2025 Financial Highlights | Metric | Q1 2025 Value | Change (YoY) | | :--- | :--- | :--- | | Revenue | $161.6 million | -12.4% | | Gross Profit | $40.9 million | - | | Gross Profit Margin | 25.3% | +30 bps | | SG&A Expenses | $35.7 million | -1.7% | | Net Loss | $3.2 million | (vs. $1.0M income in Q1 2024) | | Adjusted EBITDA | $12.0 million | -25.4% | | Net Cash from Operating Activities | $5.6 million | +$5.0 million | - The CEO noted that despite a larger-than-anticipated revenue decline from market uncertainty, the company was able to rapidly calibrate costs to preserve operational metrics[4](index=4&type=chunk) - Strategic initiatives announced include: - Reinvigorating senior leadership with new, experienced hires - Integrating Data Solutions to create a scalable asset protection ecosystem - Unifying accredited laboratories to reduce cycle times and simplify quality assurance for the Aerospace and Defense platform[1](index=1&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Q1 2025 financial performance showed lower revenue but improved cost management, gross margin, and reduced SG&A expenses [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Consolidated revenue for Q1 2025 decreased by 12.4% to $161.6 million, primarily from a $16.6 million decline in Oil & Gas - Q1 2025 consolidated revenue was **$161.6 million**, a decrease of **12.4%** from Q1 2024, primarily driven by a **$16.6 million** decrease in Oil & Gas market revenues[4](index=4&type=chunk) Revenue by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | North America | $128,902 | $150,349 | -14.3% | | International | $33,214 | $33,047 | +0.5% | | Products and Systems | $3,091 | $3,210 | -3.7% | Revenue by Industry (in thousands) | Industry | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Oil & Gas | $96,564 | $113,165 | -14.7% | | Aerospace & Defense | $20,404 | $22,118 | -7.7% | | Industrials | $18,570 | $15,199 | +22.2% | [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross profit decreased to $40.9 million, but margin improved to 25.3%, leading to a net loss and $12.0 million Adjusted EBITDA Profitability Metrics Comparison (YoY) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit | $40.9 million | $46.2 million | | Gross Profit Margin | 25.3% | 25.0% | | Net (Loss) Income | ($3.2 million) | $1.0 million | | Diluted EPS | ($0.10) | $0.03 | | Adjusted EBITDA | $12.0 million | $16.2 million | - The improvement in gross profit margin was due to lower healthcare claims expense and a favorable sales mix[5](index=5&type=chunk) - The Q1 2025 net loss of **$3.2 million** included **$3.6 million** of special items, with the non-GAAP net loss being **$0.3 million**, or **($0.01)** per share, excluding these items[2](index=2&type=chunk)[8](index=8&type=chunk)[41](index=41&type=chunk) [Expense Management](index=2&type=section&id=Expense%20Management) The company reduced SG&A expenses by 1.7% to $35.7 million, reclassified $6.0 million in costs, and incurred $3.1 million in reorganization - SG&A expenses decreased by **1.7%** to **$35.7 million** from the prior year, reflecting continued cost discipline[7](index=7&type=chunk) - The company reclassified **$6.0 million** of certain overhead and personnel expenses from SG&A to Cost of Revenue to provide greater transparency on costs directly related to service delivery[6](index=6&type=chunk) - The company recorded **$3.1 million** of reorganization and other costs related to the continued calibration of support, overhead, and other related costs[12](index=12&type=chunk) [Balance Sheet and Cash Flow](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) MISTRAS significantly improved Q1 2025 cash flow, with net operating cash increasing to $5.6 million and free cash flow improving to negative $0.2 million Cash Flow Summary (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $5,645 | $604 | | Free Cash Flow (non-GAAP) | ($177) | ($5,317) | - The improvement in free cash flow was primarily attributable to a favorable working capital reduction compared to the prior year period[10](index=10&type=chunk) Debt Summary (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross Debt | $171,874 | $169,647 | | Net Debt (non-GAAP) | $153,338 | $151,330 | [2025 Outlook](index=3&type=section&id=2025%20Outlook) MISTRAS has withdrawn its full-year fiscal 2025 guidance due to unprecedented market uncertainty and an ongoing business portfolio review - The Company is not providing full year guidance for fiscal 2025[13](index=13&type=chunk) - Reasons for withdrawing guidance include unprecedented market uncertainty from tariffs, changes to U.S. trade policy, other market conditions, and an ongoing business portfolio review by the new CEO[13](index=13&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=5&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) This section provides detailed unaudited Q1 2025 financial statements, including balance sheets, income statements, revenue breakdowns, and non-GAAP reconciliations [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) The unaudited consolidated balance sheet shows total assets of $526.8 million, with the income statement detailing the $3.2 million net loss for the quarter - Total assets were **$526.8 million** as of March 31, 2025, compared to **$523.0 million** as of December 31, 2024[21](index=21&type=chunk) - The Unaudited Condensed Consolidated Statements of Income (Loss) for the three months ended March 31, 2025, are provided, showing a net loss of **$3.168 million**[22](index=22&type=chunk)[23](index=23&type=chunk) [Non-GAAP Reconciliations](index=12&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations for key non-GAAP metrics, including Adjusted EBITDA, Free Cash Flow, and Net Income Excluding Special Items Reconciliation to Adjusted EBITDA (non-GAAP) (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income attributable to Mistras Group, Inc. | $(3,186) | $995 | | Interest expense | 3,324 | 4,430 | | Income tax (benefit)/expense | (1,168) | 119 | | Depreciation and amortization | 7,763 | 8,381 | | Share-based compensation expense | 1,302 | 1,228 | | Reorganization and other costs | 3,087 | 1,558 | | Environmental expense | 540 | — | | Foreign exchange loss (gain) | 374 | (561) | | **Adjusted EBITDA (non-GAAP)** | **$12,036** | **$16,150** | Reconciliation to Free Cash Flow (non-GAAP) (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities (GAAP) | $5,645 | $604 | | Less: Purchases of property, plant and equipment | (4,555) | (4,804) | | Less: Purchases of intangible assets | (1,267) | (1,117) | | **Free cash flow (non-GAAP)** | **$(177)** | **$(5,317)** | Reconciliation to Net Income Excluding Special Items (non-GAAP) (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income attributable to Mistras Group, Inc. (GAAP) | $(3,186) | $995 | | Special items, net of tax | $2,846 | $1,177 | | **Net (loss) income ... Excluding Special Items (non-GAAP)** | **$(340)** | **$2,172** |

Core Insights - MISTRAS Group, Inc. reported a consolidated revenue of $161.6 million for Q1 2025, reflecting a 12.4% decrease compared to Q1 2024, primarily due to a $16.6 million decline in Oil & Gas market revenues and other key markets affected by macroeconomic factors [4][6][10] - The company experienced a net loss of $3.2 million in Q1 2025, compared to a net income of $1.0 million in the same period last year, with adjusted EBITDA declining by 25.4% to $12.0 million [9][10][39] - Despite the revenue decline, gross profit margin increased by 30 basis points to 25.3%, attributed to lower healthcare claims and a favorable sales mix [5][6] Financial Performance - Consolidated revenue for Q1 2025 was $161.6 million, down from $184.4 million in Q1 2024 [6][24] - Gross profit was $40.9 million, with a gross profit margin of 25.3% [6][24] - Selling, general, and administrative expenses decreased by 1.7% to $35.7 million [8][24] - The company recorded a net loss of $3.2 million, or ($0.10) per share, compared to a net income of $1.0 million, or $0.03 per share, in the prior year [9][24] Market Dynamics - The decline in revenue was primarily driven by a decrease in Oil & Gas revenues, which fell to $96.6 million from $113.2 million year-over-year, with upstream, midstream, and downstream sectors all experiencing declines [4][27] - The company is focusing on cost management and anticipates revenue growth across primary industries, including Industrials and Infrastructure, to improve profitability metrics [4][10] Cash Flow and Debt - Net cash provided by operating activities was $5.6 million, significantly up from $0.6 million in the prior year [11][32] - The company's gross debt increased to $171.9 million as of March 31, 2025, from $169.6 million at the end of 2024 [12][36] - Free cash flow was negative $0.2 million for Q1 2025, an improvement from negative $5.3 million in the prior year [11][35] Strategic Outlook - The company is not providing full-year guidance for 2025 due to market uncertainties related to tariffs and changes in U.S. trade policy [14] - MISTRAS is leveraging its technological advantages and focusing on existing end markets to drive future growth [4][10]

Group 1 - MISTRAS Group, Inc. has scheduled a conference call for May 8, 2025, at 9:00 am Eastern Standard Time to present its first quarter results for 2025 [1] - A press release with the first quarter results will be issued after the market closes on May 7, 2025 [1] - Individuals can pre-register for the live question and answer session at a specified link [2] Group 2 - MISTRAS Group, Inc. is a global leader in technology-enabled industrial asset integrity solutions, serving critical industries such as oil & gas, aerospace & defense, power & utilities, manufacturing, and civil infrastructure [3] - The company offers a diversified portfolio of products and services, including advanced non-destructive testing, pipeline inspections, real-time condition monitoring, maintenance planning, and specialized engineering [3] - MISTRAS Group utilizes a proprietary management software suite that centralizes integrity data for predictive analytics and benchmark analysis, helping clients reduce risk, extend asset life, and optimize operational performance [3]

Core Insights - The FDA has approved IMAAVYTM (nipocalimab-aahu) for treating antibody positive generalized myasthenia gravis (gMG) in individuals aged 12 and older, marking a significant advancement for over 100,000 patients in the U.S. [1][3] - IMAAVYTM is a first-in-class FcRn inhibitor that targets pathogenic autoantibodies, providing a potentially life-changing treatment option for patients [2][5] - The approval is based on data from the ongoing Vivacity-MG3 study, which is the longest primary endpoint of a registrational trial for any FcRn blocker in adults with gMG [4] Company and Industry Overview - The Muscular Dystrophy Association (MDA) has funded over $57 million in myasthenia gravis research since its inception 75 years ago, demonstrating its commitment to advancing care and treatment options [6] - MDA emphasizes the importance of expanding treatment options for myasthenia gravis, aiming for more personalized and accessible care for patients [3][4] - The organization celebrates its 75th anniversary in 2025, highlighting its legacy in research breakthroughs and advocacy for individuals with neuromuscular diseases [8][9]

Core Insights - MISTRAS Group, Inc. has appointed Cliff Schaffer as Senior Vice President of In-Lab Services to enhance its strategy and operations in North America, particularly for the aerospace and defense and heavy manufacturing sectors [1][2]. Leadership Appointment - Cliff Schaffer brings over a decade of executive leadership experience in the testing, inspection, and certification (TIC) industry, previously serving as Vice President of Operations at Element Materials Technology, where he achieved 22% annual revenue growth [2][3]. In-Lab Services Overview - MISTRAS' in-lab services support OEMs and Tier 1 suppliers through a network of ISO 17025-accredited laboratories, offering services such as non-destructive testing, chemical and mechanical analysis, and dimensional measurement, aimed at reducing turnaround times and simplifying quality assurance [4]. Company Background - MISTRAS Group, Inc. is a leading provider of integrated technology-enabled asset protection solutions, focusing on maximizing safety and operational uptime for critical industrial and civil assets [5][6]. Industry Commitment - The company emphasizes its commitment to Environmental, Social, and Governance (ESG) initiatives and aims to lead clients in various sectors, including oil and gas, aerospace and defense, and civil infrastructure, towards operational and environmental excellence [6][7]. Technological Integration - MISTRAS enhances client value by integrating asset protection throughout supply chains and centralizing integrity data through Industrial IoT-connected digital software and monitoring solutions [7].