MG - Earnings call transcript Q1 2020

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Operator

Thank you for joining Mistras Group Conference Call for its First Quarter Ended March 31, 2020. My name is Gigi and I'll be your event manager today. We'll be accepting questions after managements prepared remarks. Participating on the call for Mistras will be Dennis Bertolotti, the Company's President and Chief Executive Officer; Ed Prajzner, Executive Vice President, Chief Financial Officer and Treasurer; and Jon Wolk, Senior Executive Vice President and Chief Operating Officer.

I want to remind everyone that remarks made during this conference call will include forward-looking statements. could from results projected. actual Company's differ those materially The

Form U.S. actual that differ with comparable the financial available directly of most Some this Form Bertolotti. reports conference the turn on certain discussion factors accordance most website. financial also yesterday's measure release the in the measures SEC. cause to with recent to reports and over the at results conference non-U.S. the these measures on filed found be report call Company's of GAAP website those SEC's in in in the Reconciliation I current that Investors can tables press GAAP will are can were Company's X-K. Dennis These to U.S. The report in section prepared now other GAAP. in contained are annual include will the the Company's XX-K financial and discussed and not in related on

Dennis M. Bertolotti

Thank morning, everyone. you Gigi. Good

As seen keep on we've partners the has actions to with of Mistras with customers, some employees, mitigating briefly what state and me comments let that the market safe far you last while on current and taken update challenging the begin and simultaneously these our so first quarter, conditions.

further stronger and all say They outstanding partners. focused this the and safety pandemic emerge while prepared to clients on of manage First, to positioning from deliver how best of through these to which current the remained have associates, our unprecedented times our is services, continuing our leadership. helping global that industry better clients, proud me I'm Mistras extremely to and let They team has conditions. responded are our well-being

continuing than operating had generate we results well-known. to become we business quarter, forecasted positive is model posted better first the our flow cash which asset In for light and revenues with solid

and quarter. the despite root end of market to began from global impacts year take this the a that pandemic experienced towards a continuing achieved first late have energy weak last that We quarter the the dual of

that we goal took immediate entering preferred As our immediate period to reinforce customers was control could protect realities. our with to became to and were we The of preserve clear focus a position that it being we on action adjust our new as things partner. reputation these to and incredible uncertainty, our

currently dedication the upon customers on a uses interest. So high is our a establishes we new high quality of our their lower our doubled believe customers market's franchise enhances technology, but recovery. have on solid eventual of getting level We help costs innovative provide to We our which Mistras. service with needs today, down rely for upon this to which to Mistras to efforts our foundation come this not from and they a to found clients the only Digital build

the At environment. time, this decisive same response took business new we actions to in

We flow. have cut CAPEX and line positive maintain significantly managing are capital and our enhance to expectations, effectively in more with revenue reduced cash working we've cost,

along further Executive and improve Board all some to I has our other forgone accelerated have while the their productivity. changes of have the technology to cuts, also We margins pay with of of employees and improve taken Team, structural some members deploying salaried compensation. nearly

our anticipated future to and adjustments our of the made assets levels rationalize have we to with Additionally, align variable headcount broadly activity.

which that in the actions efficiency, outcomes. to delivering areas Consequently, their customers superior maintaining services, our returns. reduce while improve commitment ahead these help We our forge we offer their their and costs, increase are greatest continue taking to

labor helps as respect, predictive Mistras reduce leverage instance, efficiencies customers Solution to improve are help solutions. efficiency. Digital to and transition more For our adapt improve anxious this digital In our and work well asset customers to them continue that that will we technology with non-productive as time to

Digital to our are great success monitoring, where our internet Complimentary offerings we as that Mistras sensor things of are remote as are having Digital tablets Mistras field ruggedized reporting. is industrial such revolutionizing

We increase work. a our are mechanical steady seeing in

actions and operating to long-term growth their initiatives revenue the significantly are these trying our while foundation regulations to industry and customers with facilities helping nevertheless for efficiency. our streams All their an in at diversify they have strengthen And our everyone like compliance energy are and and of just dollars in stretch top profitability. obligation else's, keep

contraction. even in this we sensing are So demand environment new opportunities of

May that the with like potentially as from We recover deviation our high We down ago. is or at believe are could work we will oil much range should either canceled. be further do and June continue potentially prices already to as being revenue be it the year that sensing and better pushed see April as to continue movement peak looks relax revenues represent if quarter some orders. decline largest XX% acknowledge second shelter-in-place the out should States a

to then nicely. expected and third would rebound quarter fourth The be

our of did of Given our details. business, charges down perform in value our the first XXX be year, this this million, through by of we the paid debt simultaneously quarter our of recorded support and second intangibles would expenditure of positive already agreement quarter of sufficient will X.X carrying operating while capital and XXXX, in was assessment cash including With to impairment non-cash credit the the go result outstanding reducing limited the have and quarter. Ed impact an expectation of million we the flow amended we year, the liquidity end COVID-XX and operations, each other to goodwill needs that the

will the the on through is to more vision and it created Our to that our job industry is our programs next future. and has more predictive define integrated Mistras the intelligence take build level over years legacy Mistras in the to

to for the Let financials. me now review turn of the call over a Ed detailed

Edward J. Prajzner

Thank you Dennis.

expected, were less than ago. quarter little XX% down a than year First revenues a from somewhat better

shutdown, as revenues offset complete was in revenues. segment were by which down nearly ago was quarter revenues where revenues off of in leasing our large somewhat tighter aerospace reflected Germany. year due a margins hampered our Conversely, million As continued by pricing underutilization the that $X with oil a was resulting To a the anticipated, run aerospace from domestic France our Gross the a international by business in to or in and saw in country's the largest margins much in million mostly as European XX.X our facility segment improvement at profit impacted in gas XX.X%, and defense. extent decline production a services somewhat staff lesser for decrease environment. from well decline,

while in both leasing also by were despite aerospace basis, a of revenues to experienced and foreign On Services to energy primarily decrease in down Century's driven in international wind the down year a currency translation ago the and year cost. international markets, revenues. a of the general, New down. due the administrative revenues and a segment -- decrease the services foreign margins with overhead weakness impact. currency this consistent addition adverse from were ago expenses Selling, from staff Gross year decreased

the that the second we XX% the should for in essential also of Also reduction year. cost the is initiated R&D, second quarter. adjustments consistent and outlook reduction with includes for all travel, XXXX, salary rate for approximately quarter overhead our in and beginning which during in overhead certain Early Board and a compensation of quarter. reduction in spend, all This took program positions. of capital reduction hires, A new temporary unemployed of by note we expense our limiting their the reduction skilled run salary to members second a of -- believe reduce efficiency the program,

the We value goodwill perform deemed related impact indicate be carry intangibles a or typically event reviewed for requirements may of events interim circumstances each and prices goodwill to triggering Xst October of with oil recoverable. not and be that or impairment whenever assessment. crude COVID-XX to an changes in was the

of permits a As first million of a intangible to XXXX, XXX.X assets. the to for related XX million million result, comprised goodwill we XX.X and charge recorded in primarily related of quarter non-cash

a diluted On was diluted net or from an on per a per special million special diluted exclusive share for $X.XX basis $X.XX this items of benefit or share basis, other items. share, per all after-tax $X.XX XX.X

but we Although maturity agreement flexibility. XXXX, revolving $XX.XX We reduced to December loan our XX, of remaining costs bank save gain while through to an unused credit additional million to effective of million with we XXXX nevertheless covenants XX, executed credit XXX to our were of including maintained ensuring the as covenant liquidity term our XXXX related compliance level existing in commitment we our amendment March maximum of line May a business. sufficient to the a a fund

We a $XXX additionally for agreement the potential expansion amended credit accordion uncommitted future. million in within maintained

during million at at XXX debt, first total by of compared million XXX end cash XXXX. to the XXX.X Gross increased X.X debt million and net March debt was XXXX. from less at of XXXX quarter XX, March to million XX, cash equivalents year XX, December XXX.X Our XXXX at the million the

As Dennis additional mentioned, XXXX. quarter paid the of already down second X.X million of we debt have an in

one adjusted of quarter in key first activities X.X the million. this themes, operating flow. Reiterating did compared line run each charges. rate total of recorded EBITDA with in a little XX.X quarter goal over our remains we adjusted the to expenditures second maintain period CAPEX We with cash a of primarily nevertheless typical prior in quarter cash of well did historically to net strong quarter We generated as for generate with operating million revenue the loss first XXXX we of has But our And quarter, in due with the million X.X aforementioned year net positive to million that further business XXXX. a capital enhanced as loss of the year XXXX, of reduce in our utilize X of In non-cash flow our this million year. impairment our the cash from first expectations. from for goal for of reputation EBITDA X.X line

crude attributable concerns pressure. macro virus of oil intense to COVID-XX prices Ongoing continued corona under put impact to the

not decrease although prior period quarter from Given from operations EBITDA providing up to We continuing level are do remain uncertainty, year are of second range to a guidance the to XXXX adjusted for the positive. XXXX. revenues cash and high we for the anticipate economic full the year expected XX%

that with cash is extremely second the difficult optimistic it consolidated of XXXX, degree will EBITDA. than corresponding the While we any higher adjusted be first this in are with half in time, flow of that revenue certainty both half improvements and to XXXX of forecast at

contingent outlook the on prices mandates. stabilization state including crude improvements, certain relaxing home continuing of This in oil and is macroeconomic

business to model confident sustainable that back over are strategy the with And our Dennis. today to call I'll over remain long-term. our the firmly committed now We turn and in we out and carrying

Dennis M. Bertolotti

at hard global at and other of Mistras while ensuring or energy, safety the alternative of as observing customers, Ed. of you our teams Whether virus infrastructure, is are energy those to industries. aerospace, facilities today's rules assets Thank work essential to valuable engagement. as well our the security inspired corona and our

are and around are oil beginning the and stabilized country on intend eye accordingly. consistent more far expected beginning a home to sure The have States we and of to relax match improve some We be we from restrictions. woods, our crude our keep stay revenues, resources recently to out are prices the at

us. much capitalize more Conversations have when within signals they become on These all Customers and to we and our industry. which March. hearing opportunities determined, need the different exist than were count there believe with stronger, this can on we be prepared customers are pandemic to they Mistras to emerge constructive. know to late Mistras plans from our the positive mid signs

We to have with need age and and are less. tools have deep we do service, developing built they're customers that on of new budgets know time how delivering over And all to relationships budget. as shrink more we to learn years dedicated going on

We are are to future excited about Mistras' our success. committed and

efficiency that is think services. assets and This trend is other may our short to that with industry Our and long growth demand in creating In optimize markets factors the continue the we pressure term, under outpace to increasingly of complex growth. for the disrupted, run over intend our but these be we to will drive growing and to safety, intense environmental, comply their regulations.

our and employees, those as other many the Our remains safety utmost well associates. concern customers of our of as Mistras

keep again to the our hard work me my done. they for Mistras facing assets must Let all technicians the deep and safe challenges the endure state while professionals work doing to get appreciation customers all the are

finding also for commend administrative make us. management a new all for me Let to this work folks way the normal Mistras and

us administrative through been. shareholders processes our a one Our focus on support patience long-term to cash strong are normal generation, and nimble for diminished collection, bit. this we you. who continue to not I we want sincerely and as ever has journey. also the recognize And have Thank

now please lines. with we up your phone Gigi, the Now take that will questions. open

Operator

Instructions]. [Operator

of line Company. from Our comes first question Edward Sidoti from & Marshall the

is Your now open. line

Edward Marshall

you, guys, doing well? you hope Dennis, how are families are Hi and Jon, Ed, your

Dennis M. Bertolotti

Good morning.

Edward Marshall

you. Thank Thank you.

about of So reduction operating I expense the to talk wanted XX%.

is the I through don't First, additive a or versus what And I corporate just then finally, are you wanted these just segments as at revisions? and get anticipate reduction, lot to or revisions, of bottom the it are offsetting level I that they might maybe like the to understand simply there? sounds are look runs understand top you be do the are additional to they you sense as a where line wanted to line through

Edward J. Prajzner

referring total that's Ed. that. Yeah, total that take to, rate XX% so is I'll This savings. that that Sure. -- overhead we're run

spread those, did it's it's a of charges run of of equal the in both there savings, We is you there's much across earlier. lease up it. an number indirect SG&A it's -- there of fixed is to below, those overheads the as name reduction, announce have SG&A. so So about that's course, did actually, nature as as well so as It's overheads combining a about up SG&A in facilities, Its rate. referring salary SG&A we

that's permanent, would see of it, on initially back a is at see run CAPEX relative that -- incremental, goes we that as as COGS a in did through. up between SG&A Some on well higher with double reductions. and form overhead it SG&A savings temporary indirect we from a piece back. all virtually salary that, revenue the in that to and in that it it revenue you'll minimizing We That level we big line. additive more the as savings, is some rate. the split hitting It's is of in piece year, travel, the point. that comes you'll the come the in the come contemplated down you of unison of earlier mention But to Other as is this well COGS activity up as streams, equally the is other where some name as happens line had really indirect the but

Edward Marshall

you maybe environment, but or probably be facilities, are emergency your discussion, embedded people call how probably first, come the Where work. it's embedded the May. give and would and that Understanding and of your wanted it. the you in call out talk maybe secondly especially wondering sense difficult solutions telling the Got third coming beginnings I'm maybe they're to out But just to project you customers April, as a project I the was the for I'm your of what about your in of think but assume that kind talk I some work at the an you of maybe the direct personnel have pretty progression maybe opportunity ultimately, is then to order conversations kind sound, that sites, would assuming I outs about you product, when outlook would working embed get the embedded be work? embedded of and

Dennis M. Bertolotti

I'll to let every thoughts, folks probably add my I'll projects at start but kept our have out. Thanks basically Jon site. Ed,

of the part, reductions COVID. to For percent the to large most we've people of zero had a due

amount customers the are work but the trying coming really outside that are in, hours. reducing amount Our are get of they they're reducing to of done, people the

days our of on some billable out XX% because still have seven you'd be a at they're sometimes are They're less, hours percentage days six well we at doing about right. of or four this, week hour XX% work. eight three furlough the now and lower of other there it XX or while a XX five employees do large and days week. of working doing just XX% or at a actually group working So much are Typically, a --

kind customers you add. -- get you there Jon in online all the just offline of come not to a trying done. think the is are to part else get work could So have that if been themselves answers They anything of rush and back

Jonathan H. Wolk

continent to everything agree the thing too. other it said, but with Yeah, you're depends you add, on which

if about think on in spotty, of it's really the businesses down. here to degree So think depending and shut the true in very countries based we've shop ring Canada. our But, But again then the based some businesses steady Dennis's States shop been Europe, in everywhere. I which been I United upon comments

in for So severe was instance France the much shutdown more throughout whole economy. that

just personnel only now sort some to So are getting of we speed. those of back

little a So depends choppy. it bit and really it's

Edward Marshall

of kind not not might across but that reduced your of efficiencies day-to-day because embrace sense looking. one the Got to that from more want about your -- the When I final just about environment how may current a digital a digital enhancements maybe customer level platform too, the to Mistras, your have think customers is it us digital staff this me Jon. easier work? impact seen your the it productivity get and helping at the and future I of think and into I at platform And is bring. as you implementation

Dennis M. Bertolotti

in just not more standing and but couple inquiries had they we're a people about of online monitoring So where even digital things, we version, the getting we more to Mistras small our In out of instances lot added aggressive one already a started Digital, an things beta it. up bridges like at but that.

old from pen. One they're they than comment home made they've fashioned do usually with way and seen of to data our site, trying customers the working when who see was at paper the more now that it

points then networks everything these and single are of but got and think end data from across involved whatever we and else. the getting you trying business completely go now doing doing, anything get day. more ways playing not in -- of multiple And data they're the and find by data the working to data it at Mistras thinking it the a are out terms haven't they're quicker home gotten what to lot of from gathering where in this, be customers I about Digital, online as turnarounds of to So doing, that you're you Board. can they're with We've much we're using

that any So are be it. a and ready of IT of get with we all to this thoughts. see about to work environment It's together. COVID things getting in Jon, a there's lot able people lot ready just those now other thinking activity make and signs

Jonathan H. Wolk

the something Agree actually of Dennis. Dennis Yeah, size customers, in question. think, we an they with To But need discussions the it the and tremendous deliver amount see opportunities them to for uniquely work really with to and customers it's opportunity amount either here you -- an deliver -- need do to and to thanks into It's It's describe productivity with discussions reasons with several it we in precisely same same we're, positioned reduce reduce it. the you several great we're a do of it what said Ed we the just them staff precisely and staff are that to of additional to to that. productivity increase sized more to bring said. work. or I

Edward Marshall

guess So silver this, of I it all into may within assistance your in digital. growth there's lining a be

job, response. Thanks Appreciate So for all time. good guys. the the

Dennis M. Bertolotti

it talking been online to a how Thanks long took Ed. get people to only think pandemic We've it. about for global and

Edward Marshall

one, Have a thanks. great

Operator

Thank you.

America. Bank line the question from of from Andrew of Obin Our next comes

is line Your open. now

David Ridley-Lane

your David above working flow defense benefit aerospace chain This heard XXXX would in in Ridley-Lane any is that helpful are expect quarter? you on cash And expect business free the to for you from capital, Thank the framers being Andrew. we've do so on also that? average second from supply anecdotally the you. air What

Jonathan H. Wolk

can interesting. I take It's Good question. Jon, is that. This

a just business, be last well. It our industry aerospace an that Aerospace held essential For essential effects business remarkably were with to for well. instance, felt. an as quarter, the to are first even up service us year, provider about during essential deemed And the business. of shutdowns as even we, was beginning as is deemed

the as be we is we'll alluded down Europe, America, so forth. the percentage Ed think general, North to, expect will of I the down in larger than extent, by in and in company effect we'll a quarter, in lower second modestly shutdowns the But to a aerospace the For overall. of be because business aerospace be down

aware of of there unless Ed. a benefit, In not expecting flow anything you free terms we're specific cash I'm that are

Edward J. Prajzner

No.

David Ridley-Lane

oil now. among and gas differences spending and has maintenance And perhaps more XXXX-XXXX now you refinery Thank other budgets stance space Are any deeply too acted versus into clients in XXXX? seeing cut back that they vendors in how cutting argued around refineries the your cautious have you. in a those

Speakers] [Multiple

Jonathan H. Wolk

will Jon, is that. this absolutely. start with I Sure, Yeah,

XXXX, I everyone was caught the price So by that -- kind I back oil think playbook I a And XXXX, that, think decline know don't in the in surprise. of of new it been grapple suppliers and seen or with coordinated. once the this I so to that. impact try This more as think twice before time the we've movie much effect, customers around has that

work. I their reduced think homes, been just out because at they at -- that were they were weren't weren't home of have scopes sorry people and literally they

somewhat. scopes we do has So first deferred because recovering half down. that and back the second levels of on work has bounce half we necessarily in because see a not job that are have been of being that There impact. come expecting been people absolutely from Certainly the

Dennis M. Bertolotti

the to let know we to sure going Guard that internet even talking I our because lockdowns there it's folks spent getting were days they to Dennis, National weren't remember There everyone out started this in. first go when we to able in all when that. remember a David highways add, and this but we're I was that and if rumors I a Yeah have exact remember together don’t may thought letters whole workers be travel. is of doing And the real authorities will that weekend weekend whoever essential walk days been different always I the employees one were

having to hit what after while to and using, standards I happen what So and But think this was people used what look made essential, fell and that one us like. the right, we get for were lot a next it essential beginning because up right. references initially was a week knew Jon's knew what to off think I next national or no in were of they work what the the day, it's was just nobody learned going to

much right as I I now much indicator how I be do can't an -- how will confirmed. work and know guarantee early see don't

Our bidding activity the what sort again for what many surprisingly was from that and fall across somewhat the we're the normal I been so things and subdued other activity are now we're has seeing for business much midstream that but say it's we fall of seeing anecdotal expected more bidding I I than don't -- seeing. a

used people a that's that's it case but a the are and to spend now seems going. the less, people keep and slower energy to right now, change think So it is it sign in to it good is where can what and work off if prices can trying I it getting way like industry this industry keep expect pull figure out to capital at. or all dramatically the But

going. I to when back what So strange off for to back really -- of now how were going think is hitting, got to get we kind close we and it's mean are first fell the to get we fast it COVID it expecting to June normal now it when by trying started in how

David Ridley-Lane

Good to hear much. very Thank it. you

Dennis M. Bertolotti

it. got You

Operator

the next Sullivan Tate you comes Thank line our Group. from of question from Maxim

Your now line is open.

Tate Sullivan

can think may meaningfully onetime margin you systems, that profit current profit factors a there I products on by XQ, services help quarter? in that breakdown was year-over-year, Hi, gross the that gross and -- a can couple staff product and systems you down the follow-up in that internationally declined thank and you

Edward J. Prajzner

run mentioned piece effective we of that but got cost out Ed, really see out. we will I April want forward factors if enough we And you react get forward. some there a the Tate. get up overheads going have one time so so overheads going we didn't going is out this to those No, positive cost so No again of the of big services fixed effecting as time to effective in indirect relatively sort forward rate is [indiscernible] April

scaled Now revenue effect the full overheads that QX for is we've for in and of that quite level QX the wasn’t there's it lagging it quarter first forward. where place of whereas the a place entirely to in kind

Tate Sullivan

mean on reduction and I on your we're XX% requirement quarter a there in is can are where background period for current can too? give of minimum on in quarter Ed based SG&A, at at arriving comment limited costs it this baseline, more Thanks earlier be [indiscernible] the on EBITDA you the already your in and visibility

Edward J. Prajzner

lift merit hirings, it Yes, Again salary place adjusted. rates hours suspending Board. -- were for whole delaying was was across rate the run we technicians, in began QX it the minimizing obviously XXXk increases, freezing -- the There's we're not reductions, hourly the their match.

bank process. close were course that you through scenario things the went see in and a to don't I place the put So, of we test stress forecast as outlook, the

in yes, support. the year flows then of of in because floor were fully of and the the cost QX company hit forward the minimum ebbs We'll requirement hit that But the the needed go as and cost those more volume. all beginning core through of revenue the there's structure hand at we'll place comfortable yeah, and place the on of believe we in continue the measures for to the of QX all sort we were outside. we I'm very So the to constantly recalibrate steps

Dennis M. Bertolotti

I Dennis. the Yeah to that lot. essentially Tate, the payroll salary mean lowest started myself. reductions I And all started of with think level up XX% We've April. first for its been a X.X% for doing

one of spent and letters to almost who off to coming the for AP our where in the locations and getting for can gone talking them to we the So our looking like top they our but and of April most gone of of XX costs of taking we all graciously are to do. landlords top to maybe send are our year. We've XX March quarter at day at caught a asking landlords April. back our end and We've back even just some lot and reductions, what

do in and to landlords a of April with it coming the trying it's all So some and lot I of close Xst of started been such and most that. May to we're mean this and

right. adjust then So our making to to and we make costs we're this of to looking possible, whatever do keep and it have to reforecast to accurate watching is reforecasting continuing sure We're the do up. we time that to at what as as resources have match a revenue, lot we

Tate Sullivan

when Thanks more on [ph]? where it stream is market comments one as so you give certainly the in can mean the differently, more can follow-up, Dennis midstream the countries an was and update you some just you the on noted -- as exposure COVID on give currently can midstream Canada, well comments different and I bought XQ more impact it

Dennis M. Bertolotti

Yes of sure. They prices gas company. oil Canada at the Canadian The as hit been business was by this the we and economy purchased their has well. in about hard in by the and time XX% volatile

quarter have on but So a in Downstream quarter that on of second will grow second midstream quarter -- first It's or will United second the of known. business expect them the in things a continues lot sort quarter, grew year. balance in to the we was a it good think had Canada, impacts in well I are States. it pretty this companies contract the to contract there the contracted in the

Tate Sullivan

thank for follow-up you details. Okay, all those

Dennis M. Bertolotti

sure. Thanks Tate,

Operator

you. Thank

Our next KeyBanc question Sean of Eastman comes from Capital. from the line

line now is open. Your

Unidentified Analyst

Alex Thanks on for questions. my Good morning Sean. guys, taking for this is

on come the you're earlier. comments up first taking, apologize if is, But guys my steps questions half control on how your coming I reduction I come for cost the I'm curious labor while just Sorry, balance of this about about these are planning thinking you how XXXX, on one guess got guys have could about plan back yourself to guess in anticipation year? work in cost for the positioning disconnected, second that still recovery overall best the you the in I

Jonathan H. Wolk

is This take will I Jon, that.

been very force as got employees, So the reduced comes looking from the high to have labor good get cases that few are Hours it get company. a on let leave indication the our to go, rates And that technicians. to was looking some workload extremely have been in been those very, half second some people of are as of had we've we the raring is, have workloads we pay and the course But retention well. which to for very what necessarily these perspective, as expect possible. adjusted extent job reduced. have are technicians they back hours, they back We've still

very So to deliver good we second feel to about demand our half. capability in customer the

Unidentified Analyst

question, Thank better. versus I understand bit wanted to just little to then what you're domestically next internationally you my seeing a and try

relatively talked just about the maybe subsectors in services bit and recover aerospace held last with better segment and seems to ones at it oil just should there, are relaxation know a little the bit I quickly and a So a talking get stay markets sense of the home in prices stabilize, assuming want recover? headwind orders than France which we and out continued like take which then little on the of and end quarter, international I U.S. longer XQ might and to

Jonathan H. Wolk

I Jon. is start. will it Yeah sure,

be. over too good as trend of trending think a resume up heaviest in the quarter we willingness So been this normal as price customers quarter. morning to of end will certainly and his also we ability continued the especially It's oil gas and up with to WTI. in Dennis impacted quarter to back and of comments the the our in all for in obviously $XX oil price back the where it's would expect said in up one to course that has ramp benchmark better the activities very third quickest the second that That's it And and beyond. first terms

extent tricky little the its early start calendar not a Aerospace XXX year in that a has expected also have of the others cutbacks perhaps the call. had we bit program to but plane Max impacted is and diverse might had us portfolio have number because a expected has that pretty the deliveries of for to Boeing challenges Certainly Airbus be aerospace. with Certainly lower. are within a of

will back sector it but may time levels. aerospace think I for more definitely that it the reach take to COVID pre snap So some

Unidentified Analyst

Thank you.

Operator

Instructions]. Thank you. [Operator

from comes Pinheiro Mitch the line from & question next Sturdivant of Our Company.

is Your open. now line

Mitchell Pinheiro

-- well. your somewhere fall, you terms Yeah, it so half? for sort of a thinking of level think the thoughts. what's to second been so questions I all but you hi, a Hope that of is into there about shutdown, at have that wave, -- in your good any there morning. One, build -- the on, Most have is second answered is second how asked do is curious and based factored just confidence their for the of what in confidence do couple half second my everybody have is is

Dennis M. Bertolotti

same to back if expecting is huge build with the cave price. to question half second a affect like XX price that. We be the it a that great a in don't that, were forecast but XX better or Mitch, something It's Dennis $XX to below here. our or time could or the We're $XX barrel from it at increase to it

the the spacing still is of still about it's high work You refineries out lot in worrying at still like although of an activity, and this was I shoulder is working rate we things customers all earlier hear of don't have coming much that. this the a going that those on talking because lot the the shoulder the population there. means later effect purchasing virus at seeing it about dampened the think there. that second get still doing all not better out out the end bidding Doesn't year COVID we come saying capital see that we health lot to because a about risks the with and half to being now see density of side a of there, pulled it right but we're of like mean back a our that customers may are out see still later put saying but I

that type to some is scenario But far there we effect that So is I being that do as still have it think be believe expect as but what is some on we -- we going barrel studied, prices be do small out there some and even we is could another changes forecast to that if state look we close need now here the this, XX into We did there that shelter-in-place realm I balances for think that isn't on nothing it to to sure. our we you're fall somebody like on certainty the believe of to that is enjoying, say make going any there's short guess But freedoms should happen like answer. something right. going fairly bid be of the to build wide time there. our they're there within

Mitchell Pinheiro

second sort well, Okay. much were anticipated any as is to that next up of here much then lost made much for that's work first how lost that? that half energy you quarter within for And to segment going months feel simply is of the been get in the would business that's describe X the how deferred the is the how XX of permanently, have to within versus

Jonathan H. Wolk

Jon, want of Well I first to time. permanent a it. would is say try It lot is

say I I'd in is performed ongoing. that that work know These is that the requirements or permanently have So being that not are performed special not have lost. maintained, don't be to now that some second are quarter facilities was that all

can seen kind situations your what you The have response second differed that so going as was gauge moved question with and and done. is be And to that the mind. now is emergency context degree. to we've want in during for always during pacing quarter reason to of be when something to So that

to of the the that to is expectation schedules though various like fact rebound quarter all second see that the thinking that doing at bets that half almost of believe second a it think not want course is us We a you're that, not. you're half. for quarter or to it reasons. second time said your all now But be it's could I been off cognizant came the going we've decent what the You you into our feel should We have second a for even originally be hedge it bode in half as pretty rebound second having going and does be for certainly good just trying be said good levels. a to but the of And quarter it's minimum. a record second move

Dennis M. Bertolotti

Mitch I guess… And

Mitchell Pinheiro

Yeah, go ahead.

Dennis M. Bertolotti

it percent I further spring I'm I springtime XX% categorize There go the the to the don’t XXXX. things work most going for was get was a fall. there again, fall probably to be know have say, the some that Could but pushed I it percent, possibly each probably into that if the is sorry, might just think a out to small sure. you was more less part pushed quarter. out but got than pushed we smaller in of

together time are them countrywide are where where in can't we closely, So They still people places for have out. like customers to small to get have a the they reacting work Europe just of and in That's the things even of part lockdowns. the so most other we come lot happen these done pushed and had work country they had gunners to somebody planned were either do entire to a in. not that the to the had within spring find within the just the then in way else the you because bring to and they turnaround be or country for ways that find couldn't someone find

here think type open in to that well fall both doing like the in having So and you borders seen down Canada have is up chance huge as as of of locked going same thing, this are and internationally have long probably less as I the spring.

Mitchell Pinheiro

your the your three anything outlook, learned sort business or an and there and last you have I year term the about even Okay, know to changed term was allocation, whether thoughts? how capital or changed has five is CAPEX intermediate curious your capital that one you to way year intermediate markets, it's question, various longer needs, usage going yet, working an and term just from from the on you're then end perspective, anything any focus for like has two thinking is way

Dennis M. Bertolotti

from advantages going diversity Yeah, while what's our insightful reacting good ability it's is the mean, our figure see now increasing home things We out right the do try working of advantages we're our do on. question. do do everyone to remotely increasing trying to things markets. a we I of to see while remotely. be how to and We to end

see at it's to have and so knowing as starting well equipment on to in. there might but their supplement some you other things doing customers definitely the that on as things where looking will the people these said customers And with data it be you earlier completely mean always not advantages out are I doing more programs they're So, of inspection it. can going line like having with what eyes bridge coming I bodies all think replace quotes

on I So efforts do a good knew be those things to is our think digitization, on our we're redoubling really our what that doing we on idea. diversification, going was

when the realize way We to just need and trying and were think we've see to and push what going it to got we and we're they will starting I talking for I see innovation start about. think think I invention the now all you this But it's create times like customers it.

have vendors. you the too. every outside this oil folks we all service oil going are that different and and always possibilities we that So do about that markets going And bankruptcies of space see from time the say tell they're don't you, forecast stable gas to at customers, of just need capital than have. things going the other that's hear gas online on we need customers look the and what and We anything it that I'll in basically like because to to the of

see ourselves be at So is versus our and are the there side coming to price is stability going And way other to as to who's going look this and well. is being affected of strong. to be of and I for we a vendor what going out customers a probably lot companies this go that the think by long-term right them

play into might that well. as it So

Mitchell Pinheiro

from all That's you. thank Okay, me.

Dennis M. Bertolotti

Thanks Mitch.

Operator

no Bertolotti remarks. this for showing turn I to you. call over closing At would like Thank back Dennis time, questions. to the further I'm

Dennis M. Bertolotti

for setback dedication. time, quarter here as the the number team you. we to adapt and entity today, and provide the economies, thank Thank The employees energy industries continues to to thank to as like continue well investors but prosperous you. landscape. the I'd increasingly a a and joining once second serve like to world's Mistras great thank value not for suffered some thank future. in we'll market, all our healthy will back that a your Mistras The Mistras service whole like Gigi, again I'd normal. also would understanding the to the to we'll safe, take energy for get we call industry markets and of new but Great, and wish while only to everyone other everyone new this

Operator

and gentlemen, concludes Thank Ladies you this participating. today's conference for call.

disconnect. may You now

Mistras (MG) 19 May 202020 Q1 Earnings call transcript