Mistras Group, Inc. (NYSE:MG) Q3 2023 Earnings Conference Call November 3, 2023 9:00 AM ET

Company Participants

Manny Stamatakis – Chairman of the Board, Interim President and Chief Executive Officer

Ed Prajzner – Senior Executive Vice President and Chief Financial Officer

Conference Call Participants

Chris Sakai – Singular Research

Mitchell Pinheiro – Sturdivant & Co.

Tim Moore – EF Hutton

Brian Russo – Sidoti

Operator

Thank you for joining Mistras Group’s Conference Call for its Third Quarter Ended September 30, 2023. My name is Michelle, and I will be your event manager today. We will be accepting questions after management’s prepared remarks. Participating on the call from Mistras Group will be Manny Stamatakis, the company’s Chairman of the Board and Interim President and Chief Executive Officer; Ed Prajzner, Senior Executive Vice President and Chief Financial 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 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 the conference call will also include certain financial measures that are not prepared in accordance with U.S. GAAP. Reconciliation of these non-U.S. GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found in the tables contained in yesterday’s press release and the company’s related current report on Form 8-K. These reports are available on the company’s website in the Investors section and on the SEC’s website.

I will now turn the conference over to Manny Stamatakis.

Manny Stamatakis

Good morning, everyone, and thank you for joining us today. In my October call, I provided a broad overview of the Board’s strategic vision for Mistras. Today, in addition to sharing more about our financial performance, I want to talk about the future of Mistras as it relates to the status of Project Phoenix. Our results for the third quarter were in line with our expectations for revenue and adjusted EBITDA. Revenues were up, and I am particularly pleased with another quarter of growth in our commercial aerospace and Data Analytical Solutions businesses, which we believe are only beginning to blossom.

Gross margin expanded while selling, general and administrative expenses contracted to help us achieve our adjusted EBITDA expectations for the quarter. The improvements in gross margin and reduction in SG&A reflect the initial impact of Project Phoenix, which we expect to continue in 2024 and beyond. As also announced yesterday in a separate press release accompanying the earnings announcement, subsequent to September 30th, we completed additional actions associated with Project Phoenix that will further reduce overhead and improve sales efficiency. Ed will provide more details on that later.