Mistras Group, Inc. (NYSE:MG) Q3 2022 Earnings Conference Call November 3, 2022 9:00 AM ET

Company Participants

Dennis Bertolotti - President & Chief Executive Officer

Ed Prajzner - Executive Vice President, Chief Executive Officer & Treasurer

Jon Wolk - Senior Executive Vice President & Chief Operations Officer

Conference Call Participants

Chris Sakai - Singular Research

Mitch Pinheiro - Sturdivant & Co.

Brian Russo - Sidoti

Operator

Thank you for joining, Mistras Group's Conference Call for its Third Quarter Ended September 30, 2022. My name is Andrea, and I'll be your event manager today. We'll be accepting questions after managements prepared remarks.

Participating on the call for Mistras Group 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. The company's actual results could differ materially from those projected. Some of those factors that can cause actual results to differ are discussed in the company's most recent annual report on Form 10-K, and other reports filed, with the SEC.

The discussion in this conference call will also include certain financial measures that were not prepared in accordance with US GAAP. Reconciliation of these non-GAAP – non-US GAAP financial measures to the most directly comparable US GAAP financial measures can be found in the tables contained in yesterday's press release, and in the company's related current report on Form 8-K. These reports are available at the company's website and in the Investors section on the SEC's website.

I will now turn the conference over to Dennis Bertolotti.

Dennis Bertolotti

All right. Thank you, Andrea. Good morning, everyone, and thank you for joining us today. Mistras reported its ninth consecutive quarter of revenue growth. Our legacy operations continued to deliver improving performance, while the investments we are making in our strategic initiatives across renewable energy, data and new markets are beginning to contribute to our overall success as well. Consequently, we believe the top line obscures the financial and fundamental growth of the business, with both foreign translation, and the continued under-realization of expectations in the downstream market masking what was otherwise a quarter of strong growth.

On the bottom line, both net income and earnings per share were up more than 28% from a year ago, whereas adjusted EBITDA for the third quarter was essentially unchanged as both gross margin and overhead are battling a rising cost environment. We are addressing this by implementing price increases, and we are making progress, breaking through customer resistance, primarily in the energy markets, where budgets do remain tight.