Earnings call transcript Q4 2022

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Operator

Thank you for joining Mistras Group's Conference Call for its Fourth Quarter and Fiscal Year ended December 31, 2022. My name is Michelle, and I will be your event manager today. Participating on the call from Mistras Group will be Dennis Bertolotti, the company's President and Chief Executive Officer; and Ed Prajzner, Executive Vice President and Chief Financial Officer.

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

filed, that the actual report company's XX-K, other factors are to on those and in SEC. discussed most reports of can results cause differ Form Some the with recent annual

measures discussion the that not Reconciliation most related US measures current of can directly company's in company's this release, tables certain US GAAP and non-US financial reports accordance were call in also compared The prepared contained website the will The Investors the press include on on be section SEC's financial financial yesterday's report these with in GAAP. are conference of measures GAAP found the in at X-K. Form the the available website. and to

Dennis Bertolotti. I now will to turn the over conference

Dennis Bertolotti

everyone. you, for Good you Thank joining Michelle. morning, Thank us. Okay.

result of line our exceeded our fourth line quarter, year. solid bottom top recent the we most As met and guidance the for a

revenue currency downstream improving adverse continued We the effect our customers organically to improvement were at all foreign revenue Up, grow profitability. driven up demand in our of by continue services. for strong XXXX, significantly the despite mid while and exchange, and

Aerospace and employee strength project commercial the by in up, wage defense also by lower over during consecutive margin offset fourth the revenue that defense to revenue we Gross pricing due the improved absorbing expenses. second actions led delays quarter. the aerospace, addition to in for was to to quarter, [ph] XX% offset inflation part year, have in taken earlier helping in in been benefit

the expansion in with costs. ago through a inflationary quarter revenue year into XXXX. reoccurring place, leverage cost customer from were quarter some administrative pricing to and expect operating In of and gross both able we discipline income, expenses the despite of margin increase these now down to margin impact profit gross selling, in for our XXXX, we general continued With actions the fourth benefit XXX%

with year, end to million the also improved $XXX.X at was significantly strength net financial from debt $XXX.X over prior year. Our the last million reduced of

years, and debt decreased been four of level ratio past to million it has of the is almost $XXX prior December by in immediately XXXX. leverage acquisition Over the since gross Onstream at the has lowest our

bank in capacity incremental our to XXXX, refinancing credit total our also favorable of credit, August and while more Additionally, completed further providing added financial available our terms flexibility. improving

installed pleased resiliency have surge core Our our have past and data and monitoring them systems providing in are that surpassed we blade significant wind XXX state-of-the-art shown Sensoria in XXXX, of our a goal during am exceptional demonstrates markets demand patented enhancing safety. to by wind seeing having we solutions to offering. their our uptime for XXX announce I installing customers over renewable this of milestone turbines our in to value energy year. commitment This

This includes base existing onshore offerings. comprehensive The their need and growing contracts customers, operating with us long-term monitoring, a present to to they expand takes wind numerous our customer among smoothly. our offer turbines and to energy offshore service solution, demand which opportunities portfolio OneSource everything and other keep to in providing maintenance approach inspection our renewable

the Moreover, the Protection Digital Mistras our serve our data solutions core execution platform experienced and Ecosystems markets, OneSuite offerings, strong demand field Software have which leading with Asset charge.

number Customers solution of bundled embracing who an both as have at adopted a now technology are revolutionary our applications sites. increasing ever

solutions. asset yet efficiency maximizes for promise another brand solution and offer are our their further protection protection and that of asset excited our We clients to OneSource operational supports

Mistras applications Suite industry. in setting combined the of over XX now XXX and Having standard issued and with OneSuite Digital X,XXX than more licenses at adoption customer of OneSuite sites to individual a the integrated is implemented subscriptions, new a

integrated solution achieving towards We signify the go-to accomplishments recent our of our partner. are progress substantial that becoming confident vision

Looking to aligned remain customers' technology, and requirements. our leverage to dedicated in ahead, and our continuing service, evolving brands customer by to continue innovation expertise our

our have which profitable EBITDA identifying refer savings. is adjusted operational AlixPartners, steps improvement and opportunities, We to meaningful growth off sustained review while review to we Project with kicked cost designed will accelerate Phoenix. to This also as achieve

We shareholder and our board success on steps are to position for us laser-focused to taking drive value.

provide will they XXXX of updates We available. the status throughout on this become as project

expect effects learned have inflation more business, to that XXXX. have Despite do recently in and the demand lingering more activity we pre-pandemic less, levels to and on return the we our and both had market with to pandemic

to this term Given return as strength nevertheless on achieve in year while flexibility are over well. trajectory our and our providing successes this otherwise growth long growth also to financial of consistent, year, XXXX, pace we the pre-pandemic sustainable to challenging the

grow commentary We cash our business, are Ed positive we improve continue new can profitability to our provide additional on and confident our core through product flow business the will and results. exciting offerings.

largest market, quarter, up the we the growth. and in wanted primary highlights revenue and both revenue market. strong consolidated and by driver revenues review I year quarter to Consequently, led the were quickly had our ended for the X% down upstream In sectors. growth our oil the by gas to

customer While the somewhat the scope strength market work. budgets and should the downstream of sustain prices upstream remains the less predictable oil due to of reductions primarily higher market, tighter in

in strength record midstream year Onstream, expect XXXX. back on which bounce continued the of had to a We

We of related has drag results. increases impact any on hit about the pricing and in customer XXXX, rate throughout the pay occurring our have of lagging increase spoken advance

reflect of successful absorbed, These to we with we increases had pleased these our expect margin gross inflation passing been XXXX. previously in that gas in the increases wage customers, have am of and negotiating I many price price our we benefit the market. in and along particularly to report increases oil

due In quarter, great had an Defense down ongoing where a new in & continue and fourth Aerospace to there our a general into growing commercial building during materials. due was this trend large in adjacent opportunities saw market XX% last quarter delay into recovery temporary to services. a the the year. to a private primarily year, we experienced side space compared the contract The own fourth that reduction aerospace, is activity expansion defense

defense our services prospects growth solutions the experiencing sector. is inspecting in for services show of industry is the large market about and growth. optimistic aerospace of is strong contractors. and defense a reduction industry from time remain shortage other a to We cycle qualified defense positioned wells where our The to many and There personnel continued

our digitizing centralizing data. Our their are as the see only additional most again our are connected, revenue data to work also those bring notably not quarter, increased particular, solutions making in offerings us In OneSuite. users they more related to digital continuing and benefits of this

as offerings Mistras' more of more trend locations We continuing look solutions customers their of see data implement to this our capabilities. at utilize and

to enables which and We continue viability the valuable insight, demonstrate the value proves data provide our with customers of technology. our to of which technology, us our

of our of quickly a a grew to We yet To oil year in X% core another steady we of stabilized aerospace progress. finish strong which combined and both operations, gas and two at XXXX. rate experienced recap, and defense,

renewing we in significant reduced strides our in our financing see improving capital credit new in our all level while of under exciting end opportunities our across facility. made to And the data invest and the We've initiatives, new lowest the and in our organization markets, we to and freeing renewable leverage years, energy solutions.

from profitability this million, and guidance XX%, our EPS Net was $X.XX, our exceeded year and most up XXXX. recent adjusted line year bottom a XX% $X.X for income respectively, Consequently, for the ago. given EBITDA improvement, was

year turn full for the you XXXX. will the and to more now Ed our financial I to fourth call quarter results over give detail on

Ed Prajzner

conversion. met Dennis, or you, It Consolidated Thank another excluding impact and $X.X range for midpoint of million morning, quarter, the revenue unfavorable prior compared our the which exceeded the weaker year, guidance attributable euro expectations. of meeting quarter to the most good quarter for the $XXX.X in of foreign strong the in everyone. our recent X.X% we US was outlook to was primarily fourth of to Mistras, approximately exchange million, dollar

XXXX, full due the of basis, X.X% weaker up primarily foreign conversion. up was US million, when to the revenue the adjusting full year approximately but impacts X.X% again, For $XX.X year, exchange for a to on currency dollar million for unfavorable $XXX.X euro GAAP

importantly, basis ago. from and both our in More XXX points from and basis ago XX segment the quarter, a year dollars International, two primary the profit expansion gross basis year quarter. segment increased consolidated points improved in increase of in in the the and point margin International X% This in expanded profitability Services fourth a margin. Gross the segments, drove XXX a Services gross

also strong was as gas particularly was as both Gulf business perspective, an X% on particularly up primarily in refinery for fourth downstream quarter. was Alaska strong, while strength to markets, overall and the drilling benefit offshore of the From from the onshore continues the reported markets. healthy Upstream continued upstream quarter, market oil downstream and our activity, the and in industry up,

continues Onstream growth, quarter. to strong Although the contribute was in midstream down

the for downstream up were was midstream year, However, and as upstream.

Our quarter, a so and saw business XXXX, back forecasted throughout the fourth defense contractor. to This for defense is up both slowdown was up year. growth to as a very ramp growth in during is also to work down generate Dennis in well, temporary We XXXX. we said, nearly private steady space doing full side the year, aerospace primarily XX% defense the expect due at defense major commercial whereas the and aerospace in revenue

expand our in overall is both tailoring Columbus benefits Heath, with expectation for to the this This week as on or Dennis demonstrates mechanical and were Hub capabilities capabilities this customers. in Ohio and understanding their our particularly customers' side, near aerospace just Our our of have Aerospace defense 'XX, last weeks for regard, market, shop labs impressed we visited continued ago and at particularly to the and ongoing offerings I for very needs continue our fit rather, we state-of-the-art and two laboratories. In purpose-built we requirements. that our our growth

comparable to gross year. Canada, as profit, second year $X.X certain subsidy mentioned, XX.X%, of last of choose The performance the better the program this relief example reflecting impact prior was half well XX% to prior As employee increase full benefit from the wage provided in million the a of Dennis to oriented in in XX.X%, profit pandemic results price than margins the which in second margin year. was our initiatives, initial year benefit which strong year benefited a gross temporary for the over of gross quarter. expense consecutive recovery decrease helped our to as 'XX quarter One

expenses reinstatement the to restoring that of the fourth million million, in of certain year company's due quarter was general 'XX $X.X higher were for the the down full was from million $XX.X in $X.X XXX(k) Note Selling, primarily $XX.X the US. the which matching costs, million year quarter. expense ago and administrative benefit than XXXX, SG&A in

Nevertheless, goal steady. the initiatives, relatively past Over where of as is Project Phoenix years, our this had success result few in overhead any ongoing revenue the as have a over aspiration achievement as of our materialize, accelerate term. that SG&A can internal combination it an we XX% of being of longer well area, holding of the the opportunities

interest reflecting to the was ago due 'XX. operating Interest milestone, can And in the we Fed significant full interest continued in Operating make a to is increase in year up continued income from despite interest expense for we actions. is was $X.X Despite a benchmark where in XXX% environment. year the which due up, down current million. this expense There quarter rate we in is believe believe a model. in rising slightly deleveraging, the the increases quarter the recent our to significant metric was rates quarter, expense leverage improvement

the As an higher of in XXXX expense XXXX deleveraging XXXX our in rates on continue reduce to but increase in are $XX year than debt to expect for we full balances. focused to approximately million our interest outstanding be are benchmark continued to anticipated we XXXX,

$X.XX fourth For quarter. net tax benefited of Net to net study million, results, approximately recorded per operating in same $X.X benefit in we income loss was credits reported the of a that share compared $X.X generated the resulting period from completion R&D in income the a a addition strong a which of to small significant the tax from or fourth million ago. quarter, year diluted

income For modeling or ago, a up for a from prospective $X.XX any the EPS year approximately purposes, was increase we period. share $X.X million diluted effective discrete was $X.XX of income would a XXXX. year from Net tax the in $X.X XX% million, per items while XX% of year XX%, exclusive anticipate rate ago in

foreign year. Keep $XX.X was the quarter the down year was recent in a the for adjusted from XXXX. EBITDA current for ago. currency line that year exchange Adjusted mind with $X.X X% million by $XX million, up Full $XX.X EBITDA approximately from adjusted our in million, in guidance, approximately adverse year million reduced most yet EBITDA impact

As well earlier. increases of first experienced inflationary XXXX, we pay the the chasing the during impact as mentioned half of as

missing $X.X due wage Additionally, of received XXXX, the adjusted which matching was August approximately was this was items, resumption by a year explicitly, during EBITDA more aforementioned in impact XXXX for of the reductions, in COVID year. XXX(k) primarily adversely or impact, million subsidies impacted benefit to this a million cost which the particularly expiration the in expiration cost company's the XXXX, additive of a the COVID-related employees $X.X temporary million $X.X US Canada and

was payment repayment this for Free CARES to under compared deferred quarter was now XXXX, made of cash complete. [ph] quarter flow the taxes $X.X Act the quarter and year same Free related this fourth of for $XX.X million million, during fourth of the in cash ago. to fiscal a XXXX. of cash flow deferral A payroll $XX.X million XXXX net is employer made was the a

capital, was impacted accounts payment flow a substantial in We an prior to $X.X to operating cash outstanding cash flow year. also million working days improvement receivable especially in anticipate associated benefit adversely by the the a provide accrued settlement, was Free which XXXX. in legal with

down $X.X were for million with total the capital $XX.X for quarter Capital the $X.X expenditures year, for year and the expenditures XXXX. from million million full

consistent to we capital XXXX, fiscal to For pre-pandemic $XX expect increase levels. expenditures up million, with

also ratio XX, down leverage $XX.X under ratio during Dennis spare, as acquisition earlier. before debt beginning was gross only of in of since year-end, leverage to just with debt December ratio compliance in the bank-defined XXXX, million, X.X%. At year. our $XXX million, XXXX, not This the covenants, of lowest immediately significant stated reduction $XX.X Onstream of also including was is As room Net all our year. had from of it's an approximately million the the we December

cash prioritize to continued flow. our primary as We reduction debt of use free

that working today, of evaluate strategy shareholder profitable as perceived other capital opportunity times continued Once the below and flow through is we to to achieved, to level we three leverage uses a accelerate our build to operations investigate reduce value. of our and cash As capital growth intend means XXXX. management, allocation ratio during and

in we for be $XXX million between to and release, noted market EBITDA million As anticipate full yesterday's $XX guidance providing $XX year million. revenue expect $XX Based free are million. our preliminary to between full million between current be additionally press adjusted million conditions, We XXXX. we to to $XXX year $XX generate to on flow and cash

We activity stable data demand developing are current of optimistic commercial about the markets, offering. solutions given improving and a energy rapidly level aerospace

free reduce outstanding. but only to lowering in also concerted continued expect to not We flow due particular, XXXX, in and results, capital, from to both operating effort significantly improve positive working operating sales day a cash our by

wrap-up before I will questions. now Dennis, over your on to take turn for the his to we call back move

Dennis Bertolotti

Hey. Ed. Thanks,

years reach believe has the work severe a thoughts. with of us wrap-up to point business an normalize few headwinds, quickly markets After strengthen as have enabled done hard to perhaps we normal. several the new to final me Let inflection a we

via with operational In ongoing addition, believe operations will margin, combination growth. in improve lever Phoenix, Project overall increase the we profitability can our and we which to review

to return As Officer. by operational our I our held Operating am am of oversight role, I taking excited operations Chief hands-on oversight a XXXX previously plan, day-to-day our to in part the over business. of more

role part could I extended staying to additional As of could become a period operations, ensuring responsibilities. my scope to be of team our the run an understand our interim potentially smoothly permanent customers. for CEO, or connected and our importance This my

leading committed future optimistic our towards the driving success. very greater the even on are business for I'm forward company and that remain we based initiatives I our pursuing. to fully

There having are the to we to the opportunities still shareholders. our positioned challenges of capitalize overcome well years regardless, that our the on few challenges value create Mistras must growth for feel overcome past in market

to continued sincerely I questions, delivering ever-changing to offering, your for all taking service employees market. safe in and mistrust superior a like Before would dedication thank their this

we We does on the market will Caring in as our and strong focusing tomorrow, company company Connects Integrity. continue allowing have for us profitable work for us. leader the further that always today, been actions to are all and a strengthen Asset

been leading still As up there achieved. has but much be I to honored Mistras, history. last questions. lines at I'm please is stated exciting And be for critical Michelle, accomplished, with that, quarter, to and more the extremely this open time in

Operator

our roster. One compile Instructions] [Operator you. Thank we Q&A moment while

comes from of line Sakai Chris question with Our first Singular the Research.

line ahead. open. Your is Please go

Chris Sakai

Dennis morning, Good Ed. and

Dennis Bertolotti

Good morning Chris.

Ed Prajzner

Chris. Hi

Chris Sakai

was main the had I the in on, Services gross question improvement First segment? for profit driver the what was

Ed Prajzner

that take Dennis. Let me

Dennis Bertolotti

Sure.

Ed Prajzner

Yeah. the rate, Aerospace the certainly them. where and I so leveled -- rate leverage, solid equation helped markets, volume were to in that for of And as They QX. had the leveled advance but some mix. that had up much certainly got good we their out think core little across a operating help had of pay profitability lagging the good gross their in continues mentioned improved that that they Well, year-over-year profit out, certainly growth we of really flattened increases Services kind year, that good been back we have caught helps. bill helped also bit utilization, growth out, just higher we of

Dennis Bertolotti

year. we We in chasing Yeah, caught Chris, it. first of the add that I'll were off inflation half the to

we businesses got data of we've and Our some us. doing this like good are onstream of and some really the feel behind other

in us past. more normal we've looks to this than the hopefully, seen So what

Chris Sakai

have do target far as XXXX? level Okay, debt great. then And for as concerned, are a levels you

Ed Prajzner

at service we we'll still, applying cash our still of we said, flow think, all this free I time. keep debt as will to residual

in back piece So, able to we of pay XXXX. should that significant a be

year. a to below the Our goal the leverage by three get end handle of is to

conversion half our you take that and divide free down if to can cash debt. in meaningful percent a take of that flow, EBITDA we our as pay So

targeting a taking to targeting we XXXX. every handle, capital XXXX debt as we'll may amount invest nickel need free paying in line, keep not back but top higher we're dollar a X.X So se. we We're really in and still the leverage in down year cash with working grow per that little of flow

Chris Sakai

-- do as provide expect on as it new any in Sensoria, many how that you blades Okay. can have install to then on And color far you Thanks. for XXXX? you

Dennis Bertolotti

really in have it's and could you and do that, Yeah, you high customers lumpy. orders on got have right nothing Chris, I gets and order. we mean, now, a but for hopes based tomorrow, it large purchase

yet, So that and we keep a to the in viable system believe is out can proved up customers we our thing some haven't directly. people forecasting growing enough data really only gotten but blade the monitors stage continue there minds, we've got we and that show are we to that still at for the

for But it you those there's various and basis of to customers got defects what was still a doing repair verifying the have things called on waiting through to we that it. not only finding expire then us go lot trial the and and but

that what still in is So we we're doing good believe but growth to Absolutely. do yet, there haven't gotten point we with that.

Chris Sakai

All right. answers. Great. for Thanks the

Dennis Bertolotti

Thank You got it. you.

Operator

Thank you. next question. moment our for And one

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

ahead. is open. Please Your line go

Mitch Pinheiro

Hey, good morning.

Dennis Bertolotti

Mitch. Morning,

Mitch Pinheiro

at want I So look for second. our just to a guidance

X% that You energy markets. like a X% could color of I about And looks was a just the talked high-end. and little – more? revenue if low-end you So stable wonder to it's between growth

and all business. certainly that to any about? there defense that at range, of So in be help Is the -- have pricing. should we end the strength area be the concerned aerospace should seems And that and low you

You've gotten pricing.

it's And the So growth. provide at of more end pricing if bottom end growth, wondering range. detail the could the low of I around was a volume the little I'd imagine range, not you like

Dennis Bertolotti

best if understand to start not the the the bottom, answer I sure I'll can. let I part about but I'm here. try me

last We got I your it has year, opportunities gas think of sector, drove year. point, lot for upstream again do to the a and believe this us. which oil the we'll

and one to previous. So going for the leads a larger, downstream what activity right like bit part for little that's a fickle more the We think sure, is, now, it us, turnaround way. is we stronger think the upstream year looks be that in than of

up But everyone's do you storm know how it and a and their more more to then goes, to forced or happens you put out pump work and utilization. try hurricane get

market. Midstream, as a So that's always bit been get it's Onstream, little really push rest is things cautious growing trying think like up going we doing in we the one that we predict. to well. the about say, to of

So we about oil, and board. probably across up feel about the gas most good

Aerospace body continuing lot of to There's to your twin demand on really larger come to of we the and that. aircraft of all point, issue. lot on except and for type type are a and only strong you back units not online, who depending a these feel to aisles of talk and what that defense, close pre-pandemic counts

try lot So there, much for we're only but – but things the also are we and not else components that only market, to a good end of chain. user, innovative the the faster casting, from everyone houses not supply for forging doing help process

it, face get sooner out more the it. faster to into a product customer the [ph] use rather is get the of the and getting a and they billing they to WIP finish, it Let's

of trying you a It's every and to The that problems, just they're to and done board overcome, and So this and and being There's about materials the day. repairs there. articles be figure trying load them as defense having are we has hear a for out replaced spend. see all consumed us. where things to across out win used about

that be, growth as see So we a business. see part won't our of as that but we

versus To part the high on our X% low to of revenue. X% point, your

a of as always for You a we line we do. of think lot it, to always we got provide that -- have range, sight

revenue larger of and the lot lot oil the contracts inside of soft We all reoccurring a portion business and the of with gas the inside have a that.

lost a on of by being good sight on little guess a I you what lot lower the a more have meant I I'm of we So of X% line that. you bit sure, not

Ed Prajzner

I understood Dennis. I that, -- think

is you the later XXXX. good on the I year, your end increases, guidance. pricing of of asking full year some XXXX that throughout To the and that think low about There low revenue point, in to feathered what in you'll the the risk. uplift have in effect Mitch, were which

XX in increase six-twelfth of price or might you'll that gotten twelfthof it XXXX. So a get you've twelfths -- -- only five-

the you'll pricing of range. year and certainly our uplift end revenue full the increases, that have So low helps derisk of

And too, keep FX was all uplift against as year mind, rate XXXX, back well. working favor, or extent to to in that works out in the our us XXXX levels FX and in the in help you revenue have some

the yes, some XXXX. So very favor, low mathematically from There's believe on of that -- direction of price we as there work a if full there's the in risk our just back well. revenue side our in back dollar year little down our swings uplift you're on And in in actually impact range.

Mitch Pinheiro

and sequential -- the the mean, as gas, with Okay. in are expectations what's just how I oil far proper. -- happen your think How there quarter going is about as picture the the in What maybe we do for about And turnaround revenue is to sure first year? -- season to estimation? that make

Dennis Bertolotti

to And year, talking this So sure proposed the the of customers the trying by early still starting and their But it's -- get manned being to still I being say, year we're up waiting the we this hold schedules. time. length that It's about year, the really and going as off for already expect. being were having things we everything we to go do to they're customers year, start time going see if uncertain their aggressive. as there's more start last expect would This they're schedules at that to more do the of see they the for this full in indications if It's the is tell the in if on are you're for turnaround much a year, matter just that. execute everyone planning how do for early early But they to full season. that work.

Mitch Pinheiro

-- fairly -- not So basis, more seeing be first the is there fit look near normal delays. a nothing might The be should things of -- your on turnaround quarter, quarter, you're a -- range? like second any so kind the spring it the growth but into year-over-year you term is in

Dennis Bertolotti

that than the to of mean customers, a moderate. Xth whole quarter starting as customers Certainly, plays they it last when like of waiting of doesn't play in but year, our January wasn't March, Yes. point, us. seem of spring There's it's that more been started -- your of and to but How do times, had season they really first. intended. the years started they more are planning a I what of out to a a lot looks can not lot February. Everything whether our for until January, marketing was the be of either. late up, year. started that a This lot year all in It's February, it April second

the what way hopefully, continue they'll forecasted. through that's and they at as point, planned this going all So had

Mitch Pinheiro

to affected? be what there longer-term looking sort component it is Project you revenue then view, their some also it And at -- a what but And expense could detail, are we -- out all? of mean, the so how of of Project an some it changes can side, is a this some more point cost where you Phoenix? quickly bit talk get like does Is of Phoenix? this Okay. gave the of from XXXX, little -- or sort meaningful to is in of about I a is how

Ed Prajzner

So I'll start with…

Dennis Bertolotti

ahead, Go if want. Ed, you

Ed Prajzner

review. sure. the I into we're niche. mean XX days we're early Yes, mean, I on

update just really we'll review. our and the we making But cost still when our at on But we on, have or This sustaining we're It's early top and yeah, update out looking on, we that maintaining actions really will forefront as as looking it's that to will time, point any to there. bottom. this get But at forecast early EBITDA Yes, we been levels we're the we're get measures we that at to on point. savings. you improvement. is not we on. and you year with estimates improvement So in come an cost, we're accelerating update that opportunity, you EBITDA the early we've act

Dennis Bertolotti

say I'll Mitch. this,

that. at scope, to doing out always too. As to to our job as a business we we out we're towards we to have we far how the how your it looking where I want our can that cost about we I question want trying see figure of more to goals to talked do think figure to towards markets the And on all side. and want move grow better intertwined mean go we're better. We've how as everything to how get they're to SG&A to do of We'll and

holistic it's as far as So scopes. a the

Ed Prajzner

support real I We to the efficient. the in cost savings implement improve results, And technology, increase these organic We we a something to want Mitch areas help important us. growth well with competitiveness That's our company hopefully as that's on drive that our to more worrying mean as doubt. talked to no the and really to aim is market, year just about will make lot really well. this process. we want

said, holistic So very as going we're it's process through. Dennis a

Mitch Pinheiro

you does outlook? -- that little can is mentioned that things bit in was question, it you've impacting remarks, can that that. see And And How products your seen we in say demand mean when recently like is it digital I surge, direct -- surge revenue a -- about -- impact? you how and your you in prepared tie the just more? and had last that a launched is talk just

Dennis Bertolotti

when as smallest to We're our group. fair, the is our of the Yeah, be groups how at work. look goes year I'll solutions going on, more we take our give Data do Solutions To we data that on Mitch. the

environment, our more all you We're in You core across but to data. it's data oil. finding solutions do used to is tied do it make field, and ways customers in of else the in heavily shop and markets. gas aerospace to between. It's the in But and it all beneficial it everything

to So the always to of how customers They're readily up to the available dust getting is day and of find our data items. try data and make a actionable going you their is and your for one What solutions now of things of show as holistic possible to saving as the data treat try them understand, you following full side from will quick be be papers we're overview other, archaic do ways it. going to everyone's have it handled data. them to view

that solutions it, see and that. strength the it's of is in application groups. inside like in more part that And all groups of under the And part of data see sales serve. to more getting and So we going things you'll us you'll respect, help it,

can as to from solution So we the at benefits things scratch be we having get count their that a a won't customer try but offering data they offering will look normally stronger that and just and benefits, just that and more do actionable head. data to perceiving

So going little question, both. it's to to of bit be a your

side, the growing, in will also you're be some customer serve. data see and more to we'll but talking that and be going that markets we to XXXX, see benefits You'll the about through across tangible the

Mitch Pinheiro

Okay. That's taking Thanks me. the all questions. for for

Dennis Bertolotti

Got it. Thanks, Mitch.

Operator

Thank one our you. And next moment question. for

with Brian comes Russo question next line of Sidoti. from the Our

ahead. go Please open. line Your is

Brian Russo

Good Hi. morning.

Dennis Bertolotti

Brian. Hey,

Ed Prajzner

Hey, Brian.

Brian Russo

Hey.

to of offerings it Just a if some these ability better? fair market And generic you retention you the say but understand profitable expand example could that base? maybe the to share follow-up question. customers, cite that, gain us help for Is sort rate higher and a on your existing also customer to give data so,

Dennis Bertolotti

on what for and were competitor is the say, there's absolutely I'd the data use over sorry, our on is drive right? data I are intelligence, us seen business customers You're portion something it's But our is. a differentiator, that. that it it, in solutions we've because just than to doubt using of revenue applications a I'm where services mean, flip better it data no of and focus going

and field, folks looking to very all seen this some it's the and the smaller always have a much our a short-term there what vessel on-land in the that or they to them as have what information particular or that able long of have, how relates critical is we're the to we meaningful inspect pressure these – slip was, we're to we're is as under short is that because term, we're and and The previously in the get of difference do benefits. offshore showing was don't touch, it temperature. the we starting, profile it's to seen look anything be been get and we've customers very of say it customer's what assets seeing and much back at but is, or data how it's rates throughout quicker, way can very folks where been to fast and a customer an operation much know for to give and what the they possible in from idea of But critical So faster significant they're anything to something reading, applications. equipment much all know taking getting trying haven't old just

need spend quicker ability and So better. – on is to the start kind return their on at we've that's to look they what customers focus showing what of on got much

in it there, holistically we better But and was that's it's will customer and drive are and to else sure well. how So things differentiator to will beginning sure, but as drive services the we that, additional any a yours to started. it the make for emphasize than services, out solutions and offering point, goal a our both where additional retention like anything data Mitch's that's applications

Brian Russo

just are be fraction in as then the to as currently or Sensoria, in how And XXXX? become commercialization number it's turbines US turbines, actually sliver operation operational overall to in XXX in can small milestones should revenue for mean, [ph] that move on calculation, Because my pipeline up soon – looking -- well in to Great. from the that? of testing I And according what the come of to Okay. a those the generating start from XXXX? actual and you we

Dennis Bertolotti

answer turbine we quick probably that the not can question proven than directly going And like really is that that be to to haven't is, saying still they is blade. technology the competes anything customers know, there seen is of something out do more truth have You concept to XXXX for lot the out your because a a they this.

There's other haven't associated the people damage, with blade that still who we stage. put us. things really on effectively parts of in but seen the directly compete prove-up turbine But anyone turbine with we're and

two lot trying more than others, dominated no that really between customers. it's it customers, There's All two but have by while. one of or XXX obviously, all real different and a strong all for they're or a of are not those scattered one like

it's trying focus this So there help do out to us of what getting these benefits it to demonstrate be be on is prove-up this customers as XXXX, That's fast that to to lumpy trials for and year still we're the to to how we're understand to mode. getting why more and of in and But going the deploying. market. going going more be we're

technologies of we we speak -- real-time is reason it capability some really it But using demonstrates years the of other we face XX people, AE let's showing ago, and have the online to I believe the really wasn't and it capability there. that XX,

and from pieces in then downloading of and weekly monthly or talking You're the server data back information. getting

to Now to this it. is customers doing we're and coming a in data with something ourselves real-time our basis, and in

the about we only to it means So it's can but using something just what we're everything the and talk all market. turbines that's really to meaningful and do,

a to profitability is would sure that customers on we're that prove we XXXX wanted because make very and is them. they're be want to to to more still going beneficial up these tight have things, answer spending things they the in window So are what than

be see with the you of -- there. million out kind as more sorry, But give still But right, XXXX is thing there. $XXX our well giving out that me ideas there's of But nothing you're improvement targets. to necessary compared lot a [ph] to data through what's we'll on wait and

Brian Russo

Great. Okay.

I can like that's falling to of do relative the looks services that pre-pandemic your meaningful referenced overall is X% where it revenue. transmission, So about of which Gen kind how grow earlier? Power I mean top-line that you total and think renewables XXXX you think

Dennis Bertolotti

Power because our projects running replace We're this we through to of at a a long-term go bit that. looking saw are and paces help Gen starting that only, its just is commissioning on getting a could So year project very that eventually decline through. other to in

you more get it Sensoria and then try So put project big or a capital you is that like on off. right? that. are outside falling That to of things couple and a related, others projects, one while You to more on one's hold lot

that of as on So much run there's and evergreen one, things. maintain not kind or

that's it. a to online, that going can is think down of as load a take in year. to adding start coming -- and go like we'll So We to yet. given that's going say, little far the as time But Sensoria base up some bit I

Ed Prajzner

life compelling Sensoria blade, do monitor as the just on for blades It's well, cycle then this will that driven mind of that we repairs sensor. blades, install now the equation Brian, is that a at part in the the the the of hardware forward we fair sell, of the the an with level do also Keep that economics also and on Sensoria be of the not maintenance we customer. as equally

and maintenance in feed to going big work the that fact piece Gen Blade. maintenance believe we the about damage, Power on nice and along been this as significant now of is more upon that flat doing is more sees side business have Wind of been a we amount of out a acts especially that's So, Sensoria prevent existing or customer piece that's well, we a there believe that have repair conditions the to as propel what's blades, we

to side the both have the So, more just of they've other Sensoria, kind compelling business already. of and us, driving there's than on we this but been are reclined it's piece that maintenance

Brian Russo

year, And million debt a $XX be if you're down debt with will of number, your than or ultimately meaning the of paying the based fluctuate expense then level just debt, expense, Great. gross that that will number $XX on $XX million? interest Okay. throughout clarification, XXXX lower is your the interest of million annual year-end

Ed Prajzner

of rate I assumed baked in hope we That's year-end of kind little under-run a level. we the interest debt bit. can kind that XXXX at for a

pretty maybe -- it So think that Fed think XXXX, number, number that just by goes the a can under-run a hoping I'm but can I outrun I will but that's we little bit. it depends fair but where I bit, a little in

Brian Russo

much. Great. very Thank Okay. you

Operator

conference turn showing back at like for I would to And remarks. further time. any the to Dennis And you. this Thank over further I'm Bertolotti questions no

Dennis Bertolotti

Michelle. Okay. you, Thank

interest So our have towards progress our providing initiatives. I'd like for business continued the Mistras. for ongoing you look with prosperous update today to on a thank day. to call, forward and Everyone, also achieved and in an joining everyone and I safe your

Operator

Thank the for concludes participating. call. you This conference

disconnect. now may You

Mistras (MG) 9 Mar 232022 Q4 Earnings call transcript