Q4 2024 Mistras Group Inc Earnings Call
Today, we'll be accepting questions. After managements prepared remarks, I would now like to turn the call over to Thomas Tobolski Treasurer. Your line is open.
© transcript Emily Beynon
Thomas Tobolski: Thank you Tania and good morning, everyone and welcome to Mistras group's fourth quarter and full year 2024 earnings conference call I'm joined today by many stay with taxes the company as executive Chairman of the board the Italian human President and Chief Executive Officer, and enterprise in their senior Executive Vice President and Chief Financial Officer, Our press release and the accompanying slides that we will be referring to today can.
And be found within the Investor Relations section of our website.
As shown on slide number two I want to remind everyone that remarks made during this conference call as well as supplemental information provided on our website contains certain forward looking statements and involve risks and uncertainties as described in <unk> SEC filings. The company's actual factors that can cause actual results to differ are discussed in the company's most recent annual report on Form 10-K and other report.
Thomas Tobolski: It's filed with the SEC the discussion in this conference call will also include certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance, but that were not prepared in accordance with U S. GAAP.
Speaker Change: Conciliation of these non U S GAAP financial measures to the most directly comparable U S. GAAP financial measures can be found the tables contained in yesterday's press release and the company's related current report on form 8-K. These reports are available at the company's website in the investors section as well as on the SEC website I will now turn the call over to Manny stem attack us.
Manny Stemacolos: Thanks, Tommy Good morning, everyone. Thank you for joining us today.
Tanya: Thank you for joining Mistras Group's conference call for its fourth quarter and fiscal year ending December 31st, 2024. My name is Tanya, and I'll be your event manager today. We'll be accepting questions after management's prepared remarks. I would now like to turn the call over to Thomas Tobolski. Treasurer, your line is open.
Speaker Change: Before we commence today's conference call I wanted to take a minute to reflect on the life of doctors Setaria Spa.
Speaker Change: The company's founder Chairman Emeritus and Board director.
Speaker Change: <unk> passed away nearly one month ago on February six 2025.
Speaker Change: On behalf of the board of directors and the entire <unk> family.
Speaker Change: To express our profound depreciation for the a measurable contribution <unk> made to the company our shareholders and the communities we serve.
Speaker Change: A visionary leader and pioneer in the field of non destructive testing and acoustic emission.
Speaker Change: Dr <unk> founded mistrusts.
Speaker Change: Originally physical acoustics Corporation.
Speaker Change: And $19 78.
Speaker Change: And dedicated over four decades to building it into a global leader in testing inspection and asset protection solutions.
Speaker Change: His expertise leadership and commitment to excellence.
Speaker Change: Were instrumental in shaping the company's strategic direction.
And fostering a culture of innovation.
Speaker Change: That remains at the core of <unk> today.
Speaker Change: His legacy will endure and live on as we move mistrusts forward in his memory.
Speaker Change: Our products and systems segment, along with our MDT and AE services will remain as essential competencies at the core of missed dropship capabilities, enabling the company to deliver on its overall mission and purpose.
Speaker Change: On a personal note on behalf of the entire company I want to express our deepest sympathies to the entire Dahabi all its family.
And remember, it's a doctor superiors Mojave OLED I ask for a brief moment of silence.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: I am sure Sotirios is looking down and smiling about our improved 2020 for Q4 and full year results.
Speaker Change: Our consolidated fourth quarter results allowed us to exceed our revised annual guidance.
Speaker Change: With the bottom line expanding significantly demonstrating the margin accretive actions that we have instituted into our business model.
Speaker Change: On a full year basis revenue was up in all reported segments products.
Speaker Change: Products and systems included in.
Speaker Change: And across all of our industry served illustrating the increasing diversity of our growing end markets.
Speaker Change: Yeah.
Speaker Change: Adjusted EBITDA.
Speaker Change: Was up over 25% versus the prior year.
Speaker Change: Reflecting significant improvement in our operating leverage.
Speaker Change: <unk> adjusted EBITDA margin expanded by 200 basis points over the period.
Speaker Change: And was our highest EBITDA margin since 2016.
Speaker Change: Our operating income of 39 8 million for the full year.
Speaker Change: 2024 was also the highest level since 2016.
Speaker Change: I'm also pleased with our fourth quarter.
Speaker Change: Our our fourth consecutive quarter generating net income growth.
Speaker Change: Which was a function of our continued annual revenue growth gross profit expansion and selling general and administrative expense reductions.
Speaker Change: Year over year 2024 was very good year for Mis drops.
Speaker Change: I believe 2025.
Speaker Change: We'll be even better as the company will continue to build momentum and energy around the profitable growth.
Speaker Change: And to ensure that our leadership team consists of the best and the brightest.
Speaker Change: I am extremely confident in the course forward for Mr offs.
Speaker Change: As executive Chair I will remain involved in overseeing the strategic path forward to maximize shareholder value.
Speaker Change: And to support the new invigorated senior leadership team.
Speaker Change: Led by our new President and Chief Executive Officer Italia Shuman.
Speaker Change: In our effort to select a new CEO Mr. <unk> undertook its most expansive search in the company's history.
Speaker Change: By reviewing over 20 candidates.
Speaker Change: Our board of directors was thrilled with the selection of Natalia Shuman.
Speaker Change: And I can share firsthand that she has hit the ground running in our first two months as CEO.
Speaker Change: And I am extremely confident in her ability to lead this company forward.
Thomas Tobolsky: I am also pleased with our fourth quarter.
Thomas Tobolsky: Our our fourth consecutive quarter generating net income growth.
Speaker Change: Under her leadership, you will see a new and more invigorated Miss drops in 2025.
Thomas Tobolsky: Which was a function of our continued annual revenue growth gross profit expansion and selling general and administrative expense reductions.
And Italia brings more than 20 years of executive leadership experience, including.
Including over eight years in the testing inspection and certification industry.
Thomas Tobolsky: Year over year 2024 was very good year for best drops.
Speaker Change: Making her uniquely positioned to lead Mr. Ross <unk>.
Thomas Tobolsky: I believe 2025.
Speaker Change: Into its next phase of growth and success.
Thomas Tobolsky: We will be even better as the company will continue to build momentum and energy around the profitable growth.
Speaker Change: She drove growth at European scientific as group Executive Vice President.
Thomas Tobolsky: And to ensure that our leadership team consists of the best and the brightest.
Speaker Change: And group operating Council member.
Speaker Change: From 2021% to 2024.
Thomas Tobolsky: Yes.
I am extremely confident in the course forward for Mr. Jos.
Prior to this she transformed Bureau, veritas as its north American CEO.
Thomas Tobolsky: As executive Chair I will remain involved in overseeing the strategic path forward to maximize shareholder value.
Speaker Change: 2017 to 2021.
Speaker Change: And before that.
She was innovating at Kelly services in our role as head of international business.
Thomas Tobolsky: And to support the new invigorated senior leadership team.
Speaker Change: Yeah.
Nick: Led by our new President and Chief Executive Officer, Nick <unk> human.
Speaker Change: <unk> Italia is a proven leader with a track record of success.
Speaker Change: And has driven transformative growth.
Speaker Change: In our effort to selected new CEO, Mr. <unk> undertook its most expansive search in the company's history.
Speaker Change: <unk> high performing teams.
Speaker Change: And led organizations through pivotal periods of change.
Nick: By reviewing over 20 candidates.
Natalia Shuman: I would now like to hand, the call over to Natalia.
Nick: Our board of directors was thrilled with the selection of Natal you Sherman.
Speaker Change: So that you can hear directly from her.
Speaker Change: Before she turns to call over to Ed to.
Nick: And I can share firsthand that she has hit the ground running in our first two months as CEO.
Speaker Change: To give a more detailed overview of our recent financial results.
Speaker Change: Natasha.
Nick: And I am extremely confident in her ability to lead this company forward.
Speaker Change: On the call the gavel and the legacy are now in your hands and.
Nick: Under her leadership, you will see a new and more invigorated Miss drops in 2025.
Speaker Change: And we are all excited for the future of Mistras.
Speaker Change: I'm not putting any pressure on yet.
Speaker Change: Yes.
Nick: <unk> brings more than 20 years of executive leadership experience, including.
Speaker Change: Good morning, everyone and thank you. Thank you very much Manny I sincerely appreciate the warm welcome from you the entire board of directors in 19 IMT.
Nick: Including over eight years in the testing inspection and certification industry.
Speaker Change: I am deeply honored to be leading <unk> into its next phase overall building on the strong foundation established by <unk> with the goal of driving meaningful value for all our customers and ensuring all our shareholders.
Nick: Making her uniquely positioned to lead Mr. Ross <unk>.
Nick: Into its next phase of growth and success.
Nick: She drove growth at European scientific as group Executive Vice President.
Nick: And group operating Council member.
Speaker Change: I have spent my first 60 days on the job actively talking to customers being in the field and our in House laboratory moving with the team as well as discussing operational strategies with many board of directors and other stakeholders.
Nick: From 2021% to 2024.
Nick: Prior to this she transformed Bureau, veritas as its north American CEO.
Nick: 2017 to 2021.
Nick: And before that.
Nick: She was innovating at Kelly services, and our role as head of international business.
Speaker Change: Our strong partnership with all of valuable customers, leading technologists and committed management team laid a solid foundation and aligns well with our long term vision.
Nick: Italia is a proven leader with a track record of success.
Nick: And it's driven transformative growth.
Speaker Change: I'm very excited for the prospects of continued profitable growth heading into 2025 and beyond.
Nick: <unk> high performing teams and led organizations through pivotal periods of change.
Speaker Change: I'm going to 'twenty before was a truly pivotal year for <unk> on the managed leadership and interim CEO Larry in the road map for success now and the company achieved a number of significant milestones, including the second highest level of adjusted EBITDA in the company's history.
Nick: I would now like to hand, the call over to Natalia So that you can hear directly from her.
Speaker Change: For she turns to call over to Ed.
Speaker Change: To give a more detailed overview of our recent financial results.
Speaker Change: Natalia.
Speaker Change: The call the gavel and the legacy are now in your hands.
Speaker Change: Additionally, we have the successful execution of project Phoenix, the company's SG&A level in dollars and as a percentage of revenue was at the lowest level. It has been in over five years.
Speaker Change: And we are all excited for the future of Mistras.
Speaker Change: But I'm not putting any pressure on you.
Speaker Change: Yeah.
Speaker Change: The company is more efficient business model and cost discipline provide a significant level of operating leverage even our organic growth aspirations.
Manny: Good morning, everyone and thank you. Thank you very much Manny I sincerely appreciate the warm welcome from you the entire board of directors and my team.
Speaker Change: I am deeply honored to be leading Mistras Group, Inc.
As shown on slide number seven the diversification across our end markets and the revenue growth in all of our segments and industries that we serve in full year for chicken before over 'twenty. Two 'twenty three are creating strong momentum for us.
Speaker Change: Well building on the strong foundation established by adults over havill with the goal of driving meaningful value for all our customers and ensure all of our shareholders.
Speaker Change: I have spent my first 60 days on the job actively talking to customers being in the field and our in House Laboratory meeting with the team as well as discussing operational strategies with Manny the board of directors and other stakeholders.
Anne: I look forward to updating you swallow this year as we make additional progress and I'm very excited for the journey I would now like to turn the call over to Anne for more detail on the fourth quarter and full year 2014.
Speaker Change: Our strong partnership with all valuable customers, leading technologists and committed management team create a solid foundation and aligns well with our long term vision.
Anne: Thank you Natalia and good morning, everyone.
Anne: Due to our improved results in operating leverage as shown on slide eight we generated $25 7 million of operating cash flow and $20 8 million of free cash flow during the fourth quarter.
Speaker Change: I am very excited for the prospects of continued profitable growth heading into 2025 and beyond.
Anne: We used this cash flow to pay down $20 1 million of bank debt during the fourth quarter.
Speaker Change: I'm going to 24 was a truly pivotal year for <unk> on the managed leadership as interim CEO Larry in the roadmap for success when Bill and the company achieved a number of significant milestones, including the second highest level of adjusted EBITDA in the company's history.
Anne: Our bank defined leverage level dropped to below two five times as of December 31, 2024. This.
Anne: This is the lowest level. This ratio has been since the third quarter of 2018.
Anne: We continue to fund our organic growth initiatives, including our investment in capital expenditures with cash flow strengthening our capabilities and footprint to better support our customers.
Speaker Change: Additionally, we have the successful execution of project Phoenix, the company's SG&A level in dollars and as a percentage of revenue was at the lowest level. It has been in over five years.
Anne: As you might recall, our net cash flow generation lagged our expectations in the earlier part of 2024, we are pleased with the gains made in the fourth quarter and we plan to maintain that momentum as we head into 2025 as.
Speaker Change: The company is more efficient business model and cost discipline provide a significant level of operating leverage either our organic growth aspirations.
Anne: As we believe self funded growth represents an attractive and durable option to drive shareholder returns.
Speaker Change: As shown on slide number seven the diversification across our end markets and the revenue growth in all of our segments and industries that we serve and full year before over 'twenty. Two 'twenty three are creating strong momentum for us.
Anne: Turning to our full year results as shown on slide nine <unk>.
Anne: <unk> 2024 consolidated revenue was $729 6 million, a three 4% increase over 2023.
As Metallica said revenue increased in all reported segments and across all industries served in 2024.
Ed: I look forward to updating you throughout this year as we make additional progress and I'm very excited for the journey I would now like to turn the call over to Ed for a more detail on the fourth quarter and full year 2004 results.
Anne: This was led by strong performance in the aerospace and defense industry, which experienced a substantial revenue increase of 13% on a four year full year basis to $87 million.
Ed: Thank you Natalia and good morning, everyone.
Anne: Our core energy industries and infrastructure industry revenue were also up in 2020 for over 23.
Ed: Due to our improved results in operating leverage as shown on slide eight we generated $25 7 million of operating cash flow and $20 8 million of free cash flow during the fourth quarter.
Anne: Full year gross profit increased to $213 1 million up four 6% as compared to the prior year.
Ed: We use this cash flow to pay down $21 million of bank debt during the fourth quarter and our bank defined leverage level dropped to below two five times as of December 31, 2024. This.
Anne: With gross profit margin expanding 30 basis points.
Anne: The increase in gross profit margin to 29, 2% was primarily due to the strong growth in our aerospace and defense industry business, which offers a higher than average margin.
Ed: This is the lowest level. This ratio has been since the third quarter of 2018.
Ed: We continue to fund our organic growth initiatives, including our investment in capital expenditures with cash flow strengthening our capabilities and footprint to better support our customers.
Anne: SG&A for the full year 2024 was $156 4 million down six 2% were $10 4 million compared to $166 8 million in 2023, as a result of ongoing cost calibration and disciplined spending.
Ed: As you might recall, our net cash flow generation lagged our expectations in the earlier part of 2024.
Anne: SG&A for the 12 months ended December 31, 2024 was 21, 4% of revenue a 220 basis point reduction from the prior year and the lowest level. It has been since 2017.
Ed: We are pleased with the gains made in the fourth quarter and we plan to maintain that momentum as we head into 2025 as.
Ed: As we believe self funded growth represents an attractive and durable option to drive shareholder returns.
Anne: Reorganization and other costs were $5 5 million for the full year 2024, compared with $12 3 million in the prior year.
Ed: Turning to our full year results as shown on slide nine <unk>.
Ed: 2024, consolidated revenue was $729 6 million, a three 4% increase over 2023.
Anne: These costs were incurred to facilitate the company's expense containment as well as the recalibration of our initiatives.
Ed: As Metallica said revenue increased in all reported segments and across all industries served in 2024.
Anne: Income from operations was $39 8 million for the full year 2024, compared to an operating loss of $1 9 million in 2023.
Ed: This was led by strong performance in the aerospace and defense industry, which experienced a substantial revenue increase of 13% on a four year full year basis to $87 million.
Anne: On a non-GAAP basis operating income was $46 2 million for the full year 2024, compared to $25 2 million in the prior year, an increase of 83, 3%.
Ed: Our core energy industries and infrastructure industry revenue were also up in 2020 for over 23.
Full year gross profit increased to $213 1 million up four 6% as compared to the prior year.
Anne: This eight year high was due in large part to our project Phoenix initiatives strong growth in our aerospace and defense business and improved performance in our international segment.
Ed: With gross profit margin expanding 30 basis points.
Anne: Interest expense was $3 9 million for the fourth quarter down from $4 7 million in the prior year quarter.
Ed: The increase in gross profit margin to 29, 2% was primarily due to the strong growth in our aerospace and defense industry business, which offers a higher than average margin.
Anne: We anticipate lower annual interest expense in 2025 through direct debt paydowns with free cash flow.
Ed: SG&A for the full year 2024 was $156 4 million down six 2% were $10 4 million compared to $166 8 million in 2023, as a result of ongoing cost calibration and disciplined spending.
Anne: As well as with continued deleveraging.
Anne: As our adjusted EBITDA growth, both of which would serve to improve our overall cost of debt via a lower credit margin spread.
Anne: We anticipate interest expense being approximately $2 million lower in 2025 versus 2024.
Ed: SG&A for the 12 months ended December 31, 2024 was 21, 4% of revenue a 220 basis point reduction from the prior year and the lowest level. It has been since 2017.
Anne: To be about $15 million next year, assuming no changes in the underlying so for rates and our anticipated TTM leverage level of less than two five times.
Anne: Our effective income tax rate was 21, 8% for the full year 2024, and lower than our statutory rate due to several discrete benefits recognized throughout the year.
Ed: Reorganization and other costs were $5 5 million for the full year 2024, compared with $12 3 million in the prior year.
Ed: These costs were incurred to facilitate the company's expense containment as well as the recalibration of our initiatives.
Anne: This effective rate in 2024 was a significant improvement over the six 5% income tax benefit rate in 2024 due to nondeductible goodwill impairment in 2023.
Ed: Income from operations was $39 8 million for the full year 2024, compared to an operating loss of $1 9 million in 2023.
Anne: We anticipate that our effective income tax rate would be approximately 25% in 2025.
Ed: On a non-GAAP basis operating income was $46 2 million for the full year 2024, compared to $25 2 million in the prior year, an increase of 83, 3%.
Anne: Our net income was $19 million or <unk> 60 per diluted share for the year ended December 31 2024.
Anne: Full year 2024, net income excluding special non-GAAP items was $22 7 million or <unk> 72 per diluted share. Excluding these same special non-GAAP items. This EPS performance is the highest level we've generated since 2016.
Ed: This eight year high was due in large part to our project Phoenix initiatives strong growth in our aerospace and defense business and improved performance in our international segment.
Ed: Interest expense was $3 9 million for the fourth quarter down from $4 7 million in the prior year quarter.
Anne: Ah.
Anne: Adjusted EBITDA was two point was $82 5 million for the full year 2024, compared to $65 8 million in the prior year, an increase of $16 7 million or 25, 3%.
We anticipate lower annual interest expense in 2025 through direct debt paydowns with free cash flow.
Ed: As well as with continued deleveraging.
Ed: As our adjusted EBITDA growth, both of which would serve to improve our overall cost of debt via a lower credit margin spread.
Anne: This increase in adjusted EBITDA was primarily attributable to a favorable business mix and overhead cost containment initiatives and this adjusted EBIT improvement represents a nearly 70% operating leverage conversion of the incremental revenue increase in 2024 into adjusted EBITDA.
Ed: We anticipate interest expense being approximately $2 million lower in 2025 versus 2024.
Ed: To be about 15 million next year, assuming no changes in the underlying so for rates and our anticipated TTM leverage level of less than two five times.
Anne: With respect to our consolidated results during the fourth quarter. Our overall revenue level was down five 1% as expected due to the anticipated decline in oil and gas revenue. However, given the strong operating leverage built into our business model. Our income from operations increased by $9 8 million as <unk>.
Ed: Our effective income tax rate was 21, 8% for the full year 2024, and lower than our statutory rate due to several discrete benefits recognized throughout the year.
Ed: This effective rate in 2024 was a significant improvement over the six 5% income tax benefit rate in 2024 due to nondeductible goodwill impairment in 2023.
Anne: Paired to the fourth quarter of 2023, despite this lower level of revenue.
Anne: And our cash conversion was equally strong in the fourth quarter of 2024 with a free cash with free cash flow, increasing $12 1 million over the fourth quarter of 2023.
Ed: We anticipate that our effective income tax rate would be approximately 25% in 2025.
Anne: With respect to our segments as shown on slide 10.
Ed: Our net income was $19 million or <unk> 60 per diluted share for the year ended December 31 2024.
Anne: The North America segment fourth revenue in the fourth quarter was was $136 9 million down seven 5% from $148 million in the prior year.
Ed: Full year 2024, net income excluding special non-GAAP items was $22 7 million or <unk> 72 per diluted share. Excluding these same special non-GAAP items. This EPS performance is the highest level we've generated since 2016.
Anne: This revenue decrease was primarily due to the anticipated decrease in North American midstream industry as well as a relatively moderate fall turnaround season in 2024, which had been anticipated.
Ed: Adjusted EBITDA was two point was $82 5 million for the full year 2024, compared to $65 8 million in the prior year, an increase of $16 7 million or 25, 3%.
Anne: This segments fourth quarter 24, gross profit was $38 9 million compared to $42 9 million in the prior year.
Anne: Most profit margin was 28, 4% for the fourth quarter of <unk> 24, a 60 basis point 60 basis point decrease from the prior year period. This decrease in gross profit margin was primarily due to sales mix.
Ed: This increase in adjusted EBITDA was primarily attributable to a favorable business mix and overhead cost containment initiatives.
Ed: This adjusted EBITDA improvement represents a nearly 70% operating leverage conversion of the incremental revenue increase in 2024 into adjusted EBITDA.
The International segment fourth quarter of 2024 revenue was 35 million up three 6% from $33 8 million in the prior year.
Ed: With respect to our consolidated results during the fourth quarter. Our overall revenue level was down five 1% as expected due to the anticipated decline in oil and gas revenue. However, given the strong operating leverage built into our business model. Our income from operations increased by $9 8 million as.
Anne: International segment revenue increased in each quarter of 2024 compared to the prior year periods and increased nine 3% on a full year basis.
Anne: This was primarily attributable to double digit revenue growth experienced in our international energy and aerospace and defense industries.
Anne: International segment fourth quarter 2024, gross profit was $10 1 million with a gross profit margin of 29% compared to 27, 7% in the prior year period.
Ed: Compared to the fourth quarter of 2023, despite this lower level of revenue.
Ed: And our cash conversion was equally strong in the fourth quarter of 2024 with a free cash with free cash flow, increasing $12 1 million over the fourth quarter of 2023.
Anne: On a full year basis 2024 International segment gross profit was $39 8 million, an increase of $6 2 million or 18, 5% over full year 2003, with gross profit margin increasing 29, 3%.
Ed: With respect to our segments as shown on slide 10.
Ed: The North America segment fourth revenue in the fourth quarter was $136 9 million down seven 5% from $148 million in the prior year.
Anne: 229, 3% from 27% in 'twenty three.
Anne: 230 basis point increase was primarily attributable to improved operating leverage and a favorable business mix.
Ed: This revenue decrease was primarily due to the anticipated decrease in North American midstream industry as well as a relatively moderate fall turnaround season in 2024, which had been anticipated.
The products segment, the products and system segment experienced strong growth and profitability with a five 2% increase in revenue from $13 million in 2023 to $13 7 million in 2024, yet experienced a <unk> eight 840% increase in income from operations.
Ed: This segments fourth quarter 24, gross profit was $38 9 million compared to $42 9 million in the prior year.
Ed: Gross profit margin was 28, 4% for the fourth quarter up 24, a 60 basis point 60 basis point decrease from the prior year period. This decrease in gross profit margin was primarily due to sales mix.
Anne: From <unk> 3 million and 23 to $2 5 million in 2024. This success was driven by cost reductions and efficiency improvements, which we expect to continue.
Ed: The International segment fourth quarter, 2024 revenue was $35 million up three 6% from $33 8 million in the prior year.
Anne: We are pleased with the performance of this segment and its offerings, including acoustic emission competencies and online monitoring capabilities, which provide us with a competitive advantage that differentiates <unk> from competitors.
Ed: International segment revenue increased in each quarter of 2024 compared to the prior year periods and increased nine 3% on a full year basis.
Anne: On a full year basis, our net cash provided by operating activities was $50 1 million for 2024 compared to $26 7 million in the prior year.
This was primarily attributable to double digit revenue growth experienced in our international energy and aerospace and defense industries.
Ed: International segment fourth quarter 2024, gross profit was $10 1 million with a gross profit margin of 29% compared to 27, 7% in the prior year period.
Anne: Free cash flow a non-GAAP financial measure was $27 1 million for full year 2024, compared to $3 1 million in the prior year.
Anne: This increase was primarily attributable to significantly improved financial results in 2024 and improvements in working capital management, particularly in accounts receivable reduction despite the higher level of annual revenue.
Ed: On a full year basis 2024 International segment gross profit was $39 8 million, an increase of $6 2 million or 18, 5% over full year 'twenty three with gross profit margin increasing 29, 3%.
Anne: Capital expenditures were fairly consistent year over year at $23 million for full year 2024, compared to $23 6 million in the prior year.
Ed: <unk> hundred 29, 3% from 27% in 'twenty three.
Ed: 230 basis point increase was primarily attributable to improved operating leverage and a favorable business mix.
Anne: The company continues to invest in efficiency improvement opportunities, including internal workflow automation and productivity enhancements.
Ed: The products segment, the products and system segment experienced strong growth and profitability with a five 2% increase in revenue from $13 million in 2023 to $13 7 million in 2024, yet experienced a <unk> eight 840% increase in income from operations.
Anne: Our gross debt was $169 6 million as of December 31, 2024, compared to $190 4 million as of December 31, 2023, a decrease of $20 8 million.
Anne: This decrease in gross debt year over year was attributable to a significant paydown, resulting from our favorable cash flow generation in 2024, the company's net debt a non-GAAP measure was $151 3 million as of December 31, 2024, compared to $172 8 million as of December 31, two.
Ed: From <unk> 3 million and 23 to $2 5 million in 2024. This success was driven by cost reductions and efficiency improvements, which we expect to continue.
Ed: We are pleased with the performance of this segment and its offerings, including acoustic emission competencies and online monitoring capabilities, which provide us with a competitive advantage that differentiates <unk> from competitors.
Anne: <unk> thousand 23.
Anne: All in all our efforts throughout 2024 are driving improved performance I am optimistic about 2025 and beyond as we continue to implement initiatives that leverage the unparalleled talent experience capabilities and knowledge that have made <unk> a leader in the industry for over 40 years.
Ed: On a full year basis, our net cash provided by operating activities was $50 1 million for 2024 compared to $26 7 million in the prior year.
Ed: Free cash flow a non-GAAP financial measure was $27 1 million for full year 2024, compared to $3 1 million in the prior year.
Speaker Change: Thanks to division of Doctor superior populous.
Speaker Change: We sincerely appreciate your continued support our stakeholders and we expect to reward your patients with improved results and full year 2025 and beyond.
Ed: This increase was primarily attributable to significantly improved financial results in 2024 and improvements in working capital management, particularly in accounts receivable reduction despite the higher level of annual revenue.
Natalia Shuman: At this time I would like to turn the call back over to Natalia for her closing remarks before we move on to take your questions.
Natalia Shuman: Thank you thank you Ed.
Ed: Capital expenditures were fairly consistent year over year at $23 million for full year 2024, compared to $23 6 million in the prior year.
Speaker Change: Given my recent appointment as CEO effective January one of this year with new leadership team and I have been and we will continue to review our entire business portfolio with the focus on continuing to grow adjusted EBITDA and earnings per share as well as continuing to improve our margins.
Ed: The company continues to invest in efficiency improvement opportunities, including internal workflow automation and productivity enhancements.
Ed: Our gross debt was $169 6 million as of December 31, 2024, compared to $190 4 million as of December 31, 2023, a decrease of $20 8 million.
Natalia Shuman: Additionally, the U S dollar to euro exchange rate strengthening.
Natalia Shuman: Our budget and the RMB foreign currency exchange rates.
Natalia Shuman: Actually readiness operation.
Ed: This decrease in gross debt year over year was attributable to a significant paydown, resulting from our favorable cash flow generation in 2024, the company's net debt a non-GAAP measure was $151 3 million as of December 31, 2024, compared to $172 8 million as of December 31, two.
Natalia Shuman: Literally the FX rate will remain essentially neutral on our adjusted EBITDA margin and other profitability metrics.
Natalia Shuman: Nevertheless, we will be assessing this FX risk as well as the potential impact of the recently announced U S. Foreign tariffs on our business and financial results for fiscal 2025.
Ed: 2023.
Natalia Shuman: And once this assessment is complete.
Ed: All in all our efforts throughout 2024 are driving improved performance I am optimistic about 2025 and beyond as we continue to implement initiatives that leverage the unparalleled talent experience capabilities and knowledge that I've made Mr. As a leader in the industry for over 40 years.
Natalia Shuman: Anticipate releasing guidance for fiscal 2025, with our goal to continue driving profitable growth margin expansion and increasing EPS.
Natalia Shuman: There are a few segments and end markets that I am most excited about.
Natalia Shuman: Our suite of industrial Iot connected digital software and data analytics being one of them.
Speaker Change: Thanks to division of Doctor, So curious populous.
Speaker Change: We sincerely appreciate your continued support our stakeholders and we expect to reward your patients with improved results and full year 2025 and beyond.
Natalia Shuman: The data evaluation journey with our customers stayed back to our founding as a company.
Natalia Shuman: And we will further leveraging this competency for growth in the future our CMS software and service offering remains at the core of our <unk> application.
Speaker Change: At this time I would like to turn the call back over to Natalia for her closing remarks before we move on to take your questions.
Natalia: Thank you thank you Ed.
Thomas Tobolsky: Given my recent appointment as CEO effective January one of this year with senior leadership team and I have been and we will continue to review our entire business portfolio with the focus on continuing to grow adjusted EBITDA and earnings per share as well as continuing to improve our margins and.
Natalia Shuman: We will also continue with our long term strategy of increased investments in solutions for aerospace and defense industry and I'll, let you elaborate noise nothing location and we will further expand our service offerings to include more additive manufacturing and mechanical work beyond quality inspection and testing.
Thomas Tobolsky: Recently, the U S dollar to Euro exchange rate strengthen since we set our budget and this R&D dissipated.
Natalia Shuman: We will also continue to expand our scope of work in private space industry and as a result of robust demand for our non destructive and destructive testing services in this area.
Thomas Tobolsky: The exchange rate.
Thomas Tobolsky: Great.
Thomas Tobolsky: Actually readiness calculation.
Thomas Tobolsky: We believe this FX rate will remain essentially neutral on our adjusted EBITDA margin and others.
Natalia Shuman: As such we expect continued strong performance in this industry over the long term.
Thomas Tobolsky: Mitch.
Natalia Shuman: While we acknowledge that there are some challenging market conditions that many of our customers within the oil and gas industry experiencing we are encouraged by our current level of bid activity and optimistic that we will continue to gain market share by offering a complete suite of integrated services.
Thomas Tobolsky: Nevertheless, we will be assessing this FX risk as well as the potential impact of the recently announced U S. Foreign tariffs on our business and financial results for fiscal 2025.
Thomas Tobolsky: And once this assessment is complete.
Anticipate releasing guidance for fiscal 2025, with our goal to continue driving profitable growth margin expansion and increasing EPS.
Natalia Shuman: To provide a meaningful ROI to our customers and we will also plan to further diversify our operations into other end markets.
Thomas Tobolsky: There are a few segments and end markets that I am most excited about our suite of industrial Iot connected digital software and data analytics being one of them.
Natalia Shuman: Additionally, it will keep expanding our field inspection business.
Speaker Change: Lifting in newer technologies such as they are.
Speaker Change: Caller as well as building advanced logistical capabilities using drawn from politics enrolled axis.
Thomas Tobolsky: The data evaluation journey with our customers paid back to our founding as a company.
Speaker Change: Our strong fourth quarter results provide evidence and confidence for our future performance given our newly found disciplined approach and newly established processes.
Thomas Tobolsky: And we will further leveraging this competency for growth in the future.
Thomas Tobolsky: RPC Mes software and service offering it means that the core of our <unk> application.
Speaker Change: Our continued robust cost management strategic partnership with our valuable portfolio of clients and our careful workforce Heather excited with the prospect of continued profitable growth moment John.
Thomas Tobolsky: We will also continue with our long term strategy of increased investments in solutions for aerospace and defense industries, and our elaborate noise definitely location and we will further extend our service offerings to include more additive manufacturing and mechanical work.
Speaker Change: I am very pleased to leave nearly 5000 employees, who believe in our vision and are working hard every day to achieve our goals and objectives.
Thomas Tobolsky: On quality inspection and testing.
Thomas Tobolsky: We will also continue to expand our scope of work in private space industry and as a result of robust demand for our non destructive and destructive testing services in this area.
Speaker Change: I also can feel the high level of energy throughout the organization.
Speaker Change: Our customers are responding in kind as well as increasing level of ROI recognition for the value that Ms. Johnson employees bring to the equation in delivering on our mission to maximize safety and operational uptime for our customers critical assets.
Thomas Tobolsky: As such we expect continued strong performance in this industry over the long term.
Thomas Tobolsky: While we acknowledge that there are some challenging market conditions that many of our customers within the oil and gas industry experiencing we are encouraged by our current level of bid activity and optimistic that we will continue to gain market share by offering a complete suite of integrated services.
Speaker Change: At this time I would like to ask the operator to open the call to your questions.
Speaker Change: Certainly Echo reminder, to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile our Q&A roster.
Thomas Tobolsky: To provide a meaningful ROI to our customers and we will also plan to further diversify our operations into other end markets.
Speaker Change: Yeah.
Speaker Change: Our first question will be coming from John <unk> of Sidoti <unk> Company. Your line is open John.
Thomas Tobolsky: Additionally, it will keep expanding our field inspection business.
Thomas Tobolsky: Investing in newer technologies, such as our T crawler as well as building advanced logistical capabilities using drawn from politics and rope access.
John: Good morning, everyone and thanks for taking the questions.
Speaker Change: Welcome aboard I'd like to start first question directly to you you.
Speaker Change: You mentioned in your prepared remarks that not only return facilities, but you met with major customers I'm curious what kind of feedback you got from customers about their perception of Mr. <unk> and what they can do better.
Thomas Tobolsky: Our strong fourth quarter results provide evidence and confidence for our future performance given our newly found discipline approach and you establish processes.
Speaker Change: So, but I encourage you as the positive feedback.
Thomas Tobolsky: Our continued robust cost management strategic partnership with our valuable portfolio of clients and our careful workforce have us excited for the prospects of continued profitable growth moment John.
Speaker Change: We're hearing from the customers.
Speaker Change: And in fact that they are really excited about.
Speaker Change: The complete suite of our offerings and when we are talking about they were entire solution for integrity and asset performance management and items, starting with the software analytics engineering services testing inspection. So there's so much that we can do to unlock the value of our offerings.
I am very pleased to leave nearly 5000 employees, who believe in our vision and are working hard every day to achieve our goals and objectives.
Thomas Tobolsky: Also can feel the high level of energy throughout the organization.
Speaker Change: So the customers are really excited about that.
Thomas Tobolsky: And our customers are responding in kind as well as increasing level of ROI recognition for the value that Ms. Johnson employees bring to the equation in delivering on our mission to maximize safety and operational uptime for our customers critical assets.
Speaker Change: Great good to hear and I guess as this might be more directed towards you.
Speaker Change: The receivable issue that you had in the past is that fully behind you or is there still repricing of some contracts that need to be done.
Speaker Change: Yes.
Speaker Change: Therefore.
Thomas Tobolsky: At this time I would like to ask the operator to open the call to your questions.
Speaker Change: Over the course of the years, yes, we believe that is well in hand it that's the goal.
Thomas Tobolsky: Certainly reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile our Q&A roster.
Speaker Change: So we feel we feel good about that heading at 225.
Speaker Change: No fair enough I got Amit everybody that that was sort of that didn't come through an entirely clear on my end, but that might be you might issue only.
Speaker Change: The next question I got is what are your thoughts about the upcoming turnaround season.
Speaker Change: Our first question will be coming from John <unk> of <unk>.
John: Sidoti <unk> Company. Your line is open John.
Speaker Change: Relative to last year's first half strong one.
John: Good morning, everyone and thanks for taking the questions.
Speaker Change: Is it a tough comp still are.
John: <unk> welcome.
Speaker Change: Are you okay.
John: Welcome aboard I'd like to start first question directly to you.
Speaker Change: Qualitative.
John: You mentioned in your prepared remarks that not only with current facilities, but you met with major customers I'm curious what kind of feedback you got from customers about their perception of Mr. <unk> and what they can do better.
Speaker Change: Impact of reviews of the turnaround season that would be helpful.
Speaker Change: Please remain on your line.
Speaker Change: Im sorry, we still hear I guess, okay.
Speaker Change: That is much much better.
Oh, sorry, John Youre hearing us okay, the operator interrupted there.
Speaker Change: You hear me okay.
Speaker Change: Yes, but I got to the last two responses were apparently broken up.
John: So very encouraged with the positive feedback that way.
Speaker Change: Oh, sorry, I'm not sure what ESR hopefully you hear me, Okay clearly now.
John: Hearing from the customers.
Speaker Change: Much much better yes, okay, sorry about that yes, we expect 25 to be a normalized year in the turnaround of oil and gas and turnarounds in particular as you just pointed out 24 was sort of lopsided. The front end was very strong spring turnaround season was rather robust the fall turnaround season, we just completed was not <unk>.
John: And in fact, they're really excited about.
John: The complete suite of our offerings when.
John: When we are talking about the entire solution for integrity and asset performance management.
John: I'm, starting with the software analytics engineering services testing inspection. So there's so much that we can do to unlock the value of our offerings.
Speaker Change: Expected inverse of that in 'twenty five we see that.
Speaker Change: The spring will be weaker the fall will be more robust so year over year. It's normalized the volume is relatively similar but it does fall into those two half so 25 will be essentially the opposite effect.
John: The customers are really excited about that.
Speaker Change: Great good to hear and I guess as this might be more directed towards you.
Speaker Change: The receivable issue that you had in the past is that fully behind you or is there still repricing of some contracts that need to be done.
Speaker Change: As we saw in 'twenty four.
Speaker Change: That makes perfect sense. Thanks for the color and one last question I'll get back into queue.
Speaker Change: Yes.
Speaker Change: Talk a little bit about Dana did out of helix.
Speaker Change: Therefore.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: From what I recall, there were some delays in the second half of last year that we're pushing.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Jobs into 2025 that would have implied double digit growth is that still the case or there are additional delays that we should be cognizant of.
Okay.
Speaker Change: So we feel very confident there.
Speaker Change: What was mentioned.
Speaker Change: Yes.
Speaker Change: So a little bit.
Our data analytical solutions business revenue was a need down in 2004, and this is due to the timing of certain projects and implementation delays. So, but we will have investments going into the business and we do anticipate growth in 2005.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Over the course of the years, yes, we believe that as well and that's the goal.
Speaker Change: Hi.
Speaker Change: So we feel we feel good about that heading into 'twenty one.
Speaker Change: No fair enough I got to admit everybody that that was set up that didn't come through an entirely clear on my end, but that might be my issue only.
In particular <unk>.
Speaker Change: <unk> continues to be in demand.
Speaker Change: The next question I got is what are your thoughts about the upcoming turnaround season.
Speaker Change: Use of the heavier focused on production efficiencies and the capital discipline that that is in the oil and gas segment. So.
Speaker Change: Relative to last year's first half strong one.
Speaker Change: Is it a tough comp still are.
Speaker Change: Jim Rodman, who leads our data on the whole business is very optimistic about gross product gross tax and at this point in our <unk> software has been implemented in more than 50% of oil.
Speaker Change: Are you okay.
Speaker Change: Hi.
Speaker Change: Alternative.
Speaker Change: Impact of reviewing of the turnaround season that would be helpful.
Speaker Change: U S based refineries and market share continues to grow. So we are we are very optimistic.
Speaker Change: Okay. Thanks for taking my questions I'll get back into queue. Thank you.
Speaker Change: Please remain on your line.
Speaker Change: Im sorry, we still hearing us okay.
Speaker Change: And one moment our next question.
Speaker Change: That is much much better.
Speaker Change: Yeah.
Jon: I'm, sorry, Jon Youre hearing us we can't hear the operator interrupted sir.
Speaker Change: Our next question will be coming from Mitchell Pinheiro of Sturtevant <unk> Company. Your line is open Mitchell.
Speaker Change: Hear me Okay.
Speaker Change: Yes.
Speaker Change: Hi.
Speaker Change: Two responses were apparently broken up.
Good morning.
Speaker Change:
Speaker Change: Oh, I'm, sorry, I'm not sure what ESR hopefully you hear me, Okay clearly now.
Speaker Change: So a question.
Speaker Change:
Speaker Change: Much better yes, okay, sorry about that yes. So we expect 25 to be a normalized year in the turnaround of oil and gas and turnarounds in particular as you just pointed out 24 was sort of lopsided. The front end was very strong spring turnaround season was rather robust the fall turnaround season, we just completed was not expected.
Speaker Change: Just curious how tariffs affect your business.
Speaker Change: Excuse me, we're having trouble hearing you on.
Speaker Change: And if you could.
Speaker Change: Something is wrong with the.
Speaker Change: The communication here.
Speaker Change: Okay.
Speaker Change: Sorry about that initially were on the same exact line. We were just speaking their prepared remarks, we apologize for that.
Speaker Change: <unk> inverse of that in 'twenty five we see that the.
Speaker Change: The screen will be weaker the fall will be more robust so year over year. It's normalized the volume is relatively similar but it does fall into those two half. So 25 will be essentially the opposite effect as we saw in 'twenty four.
Speaker Change: Any better any better right, now and where that value better yet that's better right now, but yes, okay, sorry about that yes, I had a question.
Speaker Change: Okay, sorry, sorry, I'll reenter or sorry, the microphone they have switched to the rumor we apologize for that.
Speaker Change: On the tariff question too early to tell we are assessing that but no no.
Speaker Change: That makes perfect sense. Thanks for the color and one last question I'll get back into queue.
Speaker Change: No impact at the moment, we're studying however, what the tariffs might mean to our business.
Speaker Change: Talk a little bit about Dana data analytics.
Speaker Change: I recall there were some delays in the second half of last year that we're pushing.
Speaker Change: Okay.
Speaker Change: So okay.
Speaker Change: Jobs into 2025 that would have implied double digit growth is that still the case or there are additional delays that we should be cognizant of.
Speaker Change: So not putting out guidance.
Speaker Change: Because there is some uncertainty here I get it but it's like if it's not going to have that much of an impact.
Speaker Change: Okay.
Speaker Change: I don't really understand the connection.
Speaker Change: Okay.
Speaker Change: Mitch.
Speaker Change: Our data analytical solutions business revenue was indeed down in 2004, and this is due to the timing of certain projects and implementation delays, so, but we will have.
Speaker Change: Jump in on that.
Speaker Change: As in Italian said.
Speaker Change: She and her team are evaluating all of our lines of business.
Speaker Change: And it's.
Speaker Change: Investments going into the business and we do anticipate growth in 2005.
Speaker Change: We felt it was appropriate for her to take a little time to do that and once she has had time to look.
Speaker Change: In particular PCMR continues to be in demand due to the heavier focused on production efficiencies and the capital discipline that that is in the oil and gas segment. So this.
Speaker Change: Look over everything we will be releasing guidance, it's not predicated solely on the tariffs okay. Okay got it understood.
Speaker Change:
Speaker Change: And then yeah.
Speaker Change: Jim Rodman, who leads our data on the whole business is very optimistic about growth prospects at <unk>.
Speaker Change:
Speaker Change: Just.
Speaker Change: In the oil and gas business midstream has been down for three straight quarters, and I always kind of thought midstream was going to be a more.
Speaker Change: This point in our <unk> software has been implemented in more than 50% of oil.
Speaker Change: Steadier.
Speaker Change: The U S based refineries.
Speaker Change: Type of revenue.
Speaker Change: Revenue line for you guys can you talk a little bit about what's going on in the midstream.
Speaker Change: <unk> market share continues to grow so yes, we have.
Speaker Change: Very optimistic.
Speaker Change: So the mid C sub category did experience, some delays and England to 'twenty four but we do expect growth in 2025.
Speaker Change: Okay. Thanks for taking my questions I'll get back into queue. Thank.
Speaker Change: Thank you.
Speaker Change: And one moment our next question.
Speaker Change: Okay.
Speaker Change: There are some <unk>.
Our next question will be coming from Mitchell Pinheiro of Sturtevant <unk> Company. Your line is open Mitchell yes.
Speaker Change: <unk> changes that are pending driving shrink the pipeline integrity requirements and increased demand for the <unk>.
Mitchell Pinheiro: Yes, hi.
Speaker Change: Good morning.
Speaker Change: Our in line inspection technologies that we offer so.
Mitchell Pinheiro:
Mitchell Pinheiro: So a question.
Speaker Change: And that's what leads us to believe that we will have an improved performance in midstream.
Mitchell Pinheiro: Just curious how tariffs affect your business.
Okay.
Speaker Change: Thank you for that and then.
Speaker Change:
Mitchell Pinheiro: Alright.
Mitchell Pinheiro: Yeah.
Speaker Change: Could you elaborate a little.
Mitchell Pinheiro: Okay.
They are a little bit more about the data analytical solutions segment I mean, it's obviously, a big growth focused but but sales were down last year. They were down in the fourth quarter I am curious as to why and what type of strategic changes or if theres any strategy changes being made.
Mitchell Pinheiro: Yes.
Speaker Change: Excuse me if you were having trouble hearing you on.
Speaker Change: And if you could something is wrong with the.
Speaker Change: The communication here.
Speaker Change: Okay.
Speaker Change: Oh, I'm, sorry about that Mitch we're on the same exact line. We were just speaking their prepared remarks, we apologize for that.
Speaker Change: There is no strategic changes for same data analytics, we continue investments in that.
Speaker Change: Any better any better right now or better yet that's better right now, but yes, okay, sorry about that yes, I had a question.
Speaker Change: I mentioned before there are some delays in implementation, but we continue to invest in this.
Speaker Change: Yes.
Speaker Change: Okay, sorry, sorry, I'll reenter or sorry, the microphone they have switched and everywhere we apologize for that.
Speaker Change: There are bigger.
Speaker Change: Yes on the tariff question too early to tell we are assessing that but no no.
Speaker Change: What's interesting is it really that we now have very corroborating.
Speaker Change: No impact at the moment, we're studying however, what the tariffs might mean to our business.
Speaker Change: Operator.
Speaker Change: Bringing the entire suite of our solutions.
Speaker Change: Starting with bad debts, both brand digital software out.
Speaker Change: Okay.
Speaker Change: So okay.
Speaker Change: <unk> Engineering services.
Speaker Change: I mean, so not putting out guidance.
Speaker Change: The implementation and then going into the inspection testing.
Speaker Change: Because there is some uncertainty here I get it but it's like if it's not going to have that much of an impact I don't really understand the connection.
Speaker Change: And also forward buy.
Speaker Change: Put all that money and technology, so that I think differentiate us.
Speaker Change: Okay.
Speaker Change: And as I mentioned, we already in the 50% of U S refinery. So we're certainly not changing our strategy.
Speaker Change: Mitch.
Speaker Change: I'll jump in on that.
Speaker Change: As <unk> said.
Speaker Change: She and her team are evaluating all of our lines of business.
Speaker Change: Really extended beyond oil and gas industry as.
Speaker Change: As well as the expand our market share.
Speaker Change: And.
Speaker Change: We felt it was appropriate for her to take a little time to do that and once she has had time to.
Speaker Change: Oil and gas industry.
Speaker Change: Okay.
Speaker Change: And then I.
Speaker Change: Yes.
Speaker Change: One more question and I'll get back in the queue, but.
Speaker Change: Look over everything we will be releasing guidance, it's not predicated solely on the tariffs okay. Okay got it understood.
Speaker Change: On the SG&A side.
Speaker Change: Is is like the fourth quarter level, the sustainable level in dollars.
Speaker Change: And then yes.
Speaker Change: Just.
Speaker Change: Or is there some one time help.
In the oil and gas business midstream has been down for three straight quarters, and I always kind of thought midstream was going to be a more.
To help you had in the fourth quarter can you talk about that please.
Speaker Change: Yes.
Speaker Change: Steadier type.
Speaker Change: No. That's a good question Thats, a relatively normal levels of annualized going forward. So yes, we have internalized. This project fenix discipline into our cost control cost Recalibration. So yes, that's a relatively good base to start for modeling forward, we intend to keep very tight controls on overhead up in cost.
Speaker Change: Type of.
Speaker Change: Revenue line for you guys can you talk a little bit about what's going on on the midstream.
Speaker Change: It's sold as well as down in SG&A. So yeah, that's a good run rate exiting the year with SG&A.
Speaker Change: Please standby.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Rick.
Speaker Change: Alright, well. Thank you I appreciate the answers.
Speaker Change: Yeah.
Speaker Change: Thank you Mitch.
Speaker Change: Hello.
Speaker Change: And I am showing no further questions at this time I would now like to turn the call back to Manny for closing remarks.
Speaker Change: Please standby your conference will resume momentarily.
Speaker Change: Okay.
Speaker Change: Yeah.
Manny: Thank you operator.
Manny Stemacolos: And thank you everyone for joining this important call today and also for your continued interest in Mistras.
Speaker Change: Matt.
Manny Stemacolos: With the Baton now officially passed and Italia.
Speaker Change: He will be providing you with an update on our business and progress achieved towards our ongoing initiatives on our next earnings call.
Speaker Change: Okay.
Speaker Change: Ladies and gentlemen.
Speaker Change: I'll repeat my answer.
Speaker Change: So the mid C sub category did experience some project delays and input into 'twenty four but we do expect growth in 2025.
Manny Stemacolos: As I stated.
Manny Stemacolos: I am very confident in her abilities to succeed me as Chief Executive Officer.
Speaker Change: Leading mistrust going forward.
Speaker Change: There are some regulatory changes that are pending driving street, the pipeline integrity requirements and increased demand for the <unk>.
Speaker Change: And I will continue to do my best to honor the legacy the Doctor Superior about how they all those built by being a steward of mistrust going forward with a focus on continuing to improve shareholder value.
Speaker Change: In line inspection technologies that we offer so.
Speaker Change: That's what leads us to believe that we will have improved performance in midstream.
Speaker Change: Okay.
Speaker Change: I believe we have an extremely bright future ahead of us with our invigorated executive team.
Speaker Change: Thank you for that and then.
Speaker Change: Yes.
Speaker Change: Yes.
Can you adopt a little up.
Speaker Change: Who will lead mistras for years to come delivering improved results and generating enhanced value for our shareholders.
Speaker Change: They are a little bit more about the data analytical solutions segment I mean, it's obviously, a big growth focused but but sales were down last year. They were down in the fourth quarter I am curious as to why and what type of strategic changes or if theres any strategy changes being made.
Speaker Change: Safety and asset integrity will remain our core mission and purpose.
Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: There is no strategic changes per se in data analytics, we continue investments is that.
Speaker Change: <unk> mentioned before there are some delays in implementation, but we continue to invest in this.
Speaker Change: There.
Speaker Change: What is interesting is it really that we now have very corroborating salus operates in bringing the entire suite of our solutions.
Speaker Change: Starting with bad debt software digital software.
Speaker Change: <unk> Engineering services.
Speaker Change: The implementation and then going into the.
Speaker Change: Inspection testing.
Speaker Change: And also followed by some ill call that make money and technology, so that I think differentiate us.
Speaker Change: And as I mentioned, we already in the 50% of U S refinery. So we're certainly not changing our strategy the idea is.
Speaker Change: Two really extended beyond oil and gas industry as.
Speaker Change: As well as the expand our market share.
Speaker Change: The oil and gas industry.
Speaker Change: Okay.
Speaker Change: And then I.
Speaker Change: Yes.
Speaker Change: One more question and I'll get back in the queue, but.
Speaker Change: On the SG&A side.
Speaker Change: Is is like the fourth quarter level, the sustainable level in dollars.
Speaker Change: Or is there some one time help.
Speaker Change: To help you had in the fourth quarter can you talk about that please.
Speaker Change: Yes.
No. That's a good question Thats, a relatively normal levels of annualized going forward. So yes, we have internalized. This project fenix discipline into our cost control cost Recalibration. So yes, that's a relatively good base to start for modeling forward, we intend to keep very tight controls on overhead up in costs.
Speaker Change: But as old as well as down in SG&A. So yes, that's a good run rate exiting the year with SG&A.
Speaker Change: Okay.
Speaker Change: Alright, well. Thank you I appreciate the answers.
Speaker Change: Thank you Mitch Okay.
Speaker Change: And I am showing no further questions at this time I would now like to turn the call back to Manny for closing remarks.
Speaker Change: Thank you operator.
Speaker Change: And thank you everyone for joining this important call today and also for your continued interest in <unk>.
Speaker Change: With the Baton now officially passed to Natalia.
Natalia: She will be providing you with an update on our business and progress achieved towards our ongoing initiatives on our next earnings call.
Speaker Change: As I stated I am very confident in her ability to succeed me as Chief Executive Officer.
Natalia: Leading mistrust going forward.
Speaker Change: Yes.
Speaker Change: And I will continue to do my best to honor the legacy the Doctor Superior it's about how they.
Speaker Change: Built by being a steward of mistrust going forward with a focus on continuing to improve shareholder value.
I believe we have an extremely bright future ahead of us with our invigorated executive team.
Speaker Change: Who will lead mistras for years to come.
Speaker Change: Delivering improved results and generating enhanced value for our shareholders.
Speaker Change: Safety and asset integrity will remain our core mission and purpose.
Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
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