Q1 2025 Mistras Group Inc Earnings Call

Operator: At this time, I would like to welcome you to Mistras Group Inc Q1 2025 earnings call. All lines have been placed on mute to prevent any backtracking.

Mistras Group, Inc, Q1, 2025 earnings call.

All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, and if you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application.

After the Speakers' remarks, there will be a question and answer session.

If you would like to ask a question. During this time and if you have joined via the webinar. Please use the raise hand icon, which can be found at the bottom of your webinar application.

Thomas Tobolsky: At this time, I would like to turn the call over to Thomas Tobolsky, Treasurer.

At this time I would like to turn the call over to Thomas Tobolski Treasurer.

Thomas Tobolsky: Good morning, everyone, and welcome to Mistras Group's first quarter 2025 earnings conference call. I'm joined today by Natalia Shuman, President and Chief Executive Officer, and Ed Prajzner, Senior Executive Vice President and Chief Financial Officer.

Speaker Change: Good morning, everyone and welcome to Mistras group's first quarter 2025 earnings conference call I'm joined today by the Italian Sherman, President and Chief Executive Officer, and Enterprise <unk> Senior Executive Vice President and Chief Financial Officer before we start I want to remind everyone that remarks made during this conference call as well as supplemental information provided on our <unk>.

Thomas Tobolsky: Before we start, I want to remind everyone that remarks made during this conference call, as well as supplemental information provided on our website, contain certain forward-looking statements and involve risks and uncertainties, as described in Mistras' 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 reports filed with the SEC.

Speaker Change: Website contains certain forward looking statements that involve risks and uncertainties as described in <unk> SEC filings the company's actual factors that could 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.

Thomas Tobolsky: 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. 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.

Speaker Change: 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 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.

Speaker Change: On form 8-K.

Thomas Tobolsky: These results are available on the company's website in the Investors section and on the SEC's website.

Speaker Change: These results are available on the company's website in the investors section and on the Sec's website I will now turn the call over to the Italian Shirley.

Natalia Shuman: I will now turn the call over to Natalia Shuman. Thank you. Good morning, everyone. Thank you for joining us today. It is my pleasure to be providing you with an update on our program. Despite the larger-than-anticipated year-over-year decline in revenue driven by overall market uncertainty, we were nevertheless able to rapidly calibrate costs and expenses down during the first quarter to the revenue level in order to preserve our bottom-line operational matrix. Having said that, with our continued focus on cost and expense management, including a reduction in our administrative support functional costs, and coupled with anticipated growth across all primary and markets, we are confident that these drivers will provide an improvement in key profitability measures over the remainder of the year.

Shirley: Thank you good morning, everyone. Thank you for joining US today. It is my pleasure to be providing you with an update on our progress.

Shirley: Despite the larger than anticipated year over year decline in revenue driven by overall market uncertainty, we were nevertheless, able to rapidly calibrate costs and expenses down during the first quarter to the revenue level in order to preserve our bottom line operational metrics having.

Shirley: Having said that with our continued focus on cost and expense management, including a reduction in our administrative support function costs and coupled with anticipated growth across all primary end markets. We are confident that these drivers will provide an improvement in key profitability measures over the remainder of the year.

Natalia Shuman: As shown on slide three, during first quarter as a CEO of Mistras, I have been focused on three key initiatives for our business, which are first, leadership talent evaluation, second, recalibration of our cost base to the current revenue levels and market conditions, and third, developing growth strategies across all businesses and service delivery optimization. On the Talent Evaluation Initiative, I am very pleased to have on-boarded various high-caliber talent to our organization, including two senior executives focused on growth within our data solution. a new leader for our Aerospace and Defense Division, and new heads of our Marketing, Safety and Compliance, and IT Functions.

Speaker Change: As shown on slide three during first quarter as a CEO of <unk> I have been focused on three key initiatives for our business.

Speaker Change: Our first leadership talent evaluation second Recalibration of our cost base to the current revenue levels and market conditions and third developing growth strategies across all businesses and service delivery optimization.

Speaker Change: On the talent evaluation initiative I am very pleased to have onboard at various high caliber talent to our organization, including two senior executives focus on growth within our data solutions.

Speaker Change: A new leader for our aerospace and Defense Division and new heads of our marketing safety and compliance functions.

Speaker Change: <unk> functions.

Natalia Shuman: Each of these individuals have proven track records of success in their careers and bring strong industry expertise and critical thought leadership to continuously improve and enhance our organization. These individuals are quickly getting up to speed.

Speaker Change: Each of these individuals have proven track records of success in their careers and brings strong industry expertise and critical thought leadership to continuously improve and enhance our organization. These individuals are quickly getting up to speed. This positions plus several strategic hires to our operations.

Natalia Shuman: These positions, plus several strategic hires to our operations team, have the entire leadership team excited for the current and long-term future of the company.

Speaker Change: Team have the entire leadership team excited for the current and long term future of the company.

Natalia Shuman: On the Service Delivery Model Optimization Initiative, we are continuing to review all operational aspects of our current services portfolio in collaborative manner with our customers to ensure that we're achieving a fair and adequate ROI for the services we provide. We are adjusting our code base according to current conditions, price pressures, and other contract economics.

Speaker Change: On the service delivery model optimization initiative, we are continuing to review all operational aspects of our current services portfolio and collaborative manner with our customers to ensure that we are achieving a fair and adequate ROI for the services we provide.

Speaker Change: We are adjusting our cost base. According to current conditions price pressures and the other contract economics.

Natalia Shuman: On the Growth Strategies Initiative, I am focused on accelerated expansion across core end markets like oil and gas and airspace and defense, with a particular emphasis on delivering integrated solutions that leverage the full depth of our offerings, including data analytics and monitoring technologies. As part of Mistras' data solution strategy, we are accelerating growth by delivering tailored, high-value solutions that integrate our proprietary software, advanced analytics, and trusted field services. A prime example of this is our Q1 2025 release of PCMS Mobile, our cloud-based application purpose-built to optimize real data capture. Quality and Analysis in Mechanical Integrity Program.

Speaker Change: On the growth strategy initiative I am focused on accelerated expansion across core end markets like oil and gas and aerospace and defense with a particular emphasis on delivering integrated solutions that leverage the full depth of our offerings, including data analytics and monitoring.

Speaker Change: Knowledges.

Speaker Change: As part of mistrust data solution strategy, we are accelerating growth by delivering tailored high value solutions that integrate our proprietary software advanced analytics and trusted field services.

Speaker Change: A prime example of this is our Q1 2025 release of Pcm's mobile our cloud based application purpose build to optimize real data data capture.

Speaker Change: Quality and analysis and mechanical integrity programs.

Natalia Shuman: Delivered within a one-suite ecosystem, PCMS Mobile connects inspection planning in PCMS, mobile field execution, and post-inspection analytics into a unified workflow, improving asset performance while reducing rework and administrative burden. This latest release introduces a new web-based portal for smarter work assignment and pre-submission data review, giving customers expanded control over data quality and enabling faster, more confident decision making. This proprietary and vertically integrated approach combining software, services, analytics, and engineering on the one platform is what sets Mistras apart from competition. We are not just enabling digital transformation for our clients, we are leading it, helping our customers unlock value through connected intelligence, end-to-end integrity management, and scalable innovation built for the future of asset protection.

Speaker Change: Delivered within the <unk> suite ecosystem Dcms marble connects inspection planning empty CMS mobile field execution and post inspection analytics into unified workflow, improving asset performance and quality do you seen rework and administrative burden.

Speaker Change: This latest release introduces a new web based portal for smarter work assignment and pre submission data review given customers expanded control over data quality and enabling faster more confident decision making.

Speaker Change: This proprietary and vertically integrated approach combining software services analytics and engineering on the one platform is what sets <unk> apart from competition. We are not just enabling digital transformation for our clients, we are leading in helping our customers on local value Shaw.

Speaker Change: Connected intelligence and to and integrity management and scalable innovation build for the future of asset protection.

Natalia Shuman: Related to this initiative, we recently officially announced the launch of Mistras Data Solution Brand, which consolidates our data-centric services, software solutions, and technologies under one umbrella. Mistras Data Solutions strengthens our commitment to delivering smarter operations for asset-intensive end markets, including energy, aerospace and defense, infrastructure, and manufacturing.

Speaker Change: Related to this initiative, we recently officially announced the launch of MS trials data solution brands, which consolidates, our data centric services software solutions and technologies under one umbrella.

Speaker Change: <unk> data solutions strengthen our commitment to delivering smart operations for asset intensive end markets, including energy aerospace and defense infrastructure and manufacturing.

Natalia Shuman: Let me now share some of my thoughts on our performance this quarter before Ed goes in more detail behind the financials. Although revenue was down over 12% year-over-year, this low level of revenue was somewhat anticipated because our first quarter of 2024 was a tough comparison with a robust spring turnaround season in oil and gas and a strong airspace and defense demand in the first quarter of 2024. The largest revenue decline of $16.6 million was in oil and gas and market and was mostly noted in the downstream sector due to timing of turnarounds and other projects.

Speaker Change: Let me now share some of my thoughts on our performance this quarter before Ed goes in more detail behind the financials.

Speaker Change: Although revenue was down over 12% year over year. This low level of revenue was somewhat anticipated because our first quarter of 2024 was a tough comparison with a robust spring turnaround season in oil and gas and a strong aerospace and defense demand in the first quarter.

Speaker Change: Of 2024, the largest revenue decline of $16 6 million within oil and gas end markets and was mostly permanently noted in the downstream sector due to timing of turnarounds and other projects.

Natalia Shuman: With regards to customer turnarounds, our first quarter 2025 turnarounds were down $6.5 million from the prior year as anticipated. But we expect to recover this gap and exceed the remaining 2025 total turnaround revenue versus prior year by approximately $6.5 million. We have seen a reduction of customer spending and project push-outs in upstream and midstream sub-industries as our customers are dealing with market uncertainties and budgetary reduction initiatives. We experienced a decline of $1.7 million in airspace and defense end markets, which was primarily due to macroeconomic uncertainty causing customer delays and deferrals. Delays in this market were also driven by supply chain disruption causing our large customers to temporarily slow down production, which in turn leads to less demand for non-destructive testing and other lab services.

Speaker Change: With regards to customer turnarounds, our first quarter 2025, turnarounds were down $6 5 million from the prior year as anticipated, but we expect to recover this gap and exceed the remaining 2025 total turnarounds revenue versus prior year by <unk>.

Speaker Change: Ultimately $6 5 million.

Speaker Change: We have seen a reduction of customer spending and project push outs in upstream and midstream sub industries as our customers are dealing with market uncertainties and budgetary reduction initiatives.

Speaker Change: We experienced a decline of $1 7 million in the aerospace and defense end market, which was primary due to macroeconomic uncertainty, causing customer delays and deferrals.

Speaker Change: <unk> in this market were also driven by supply chain disruption, causing all large customers to temporarily slow down production, which in turn lead to less demand for non destructive testing and other lab services.

Natalia Shuman: Although we experienced a somewhat slower than anticipated start to 2025 in our two largest end markets. We did not experience any significant customer attrition or market share changes in the first quarter. And therefore, we are cautiously optimistic for the balance of the year. Specifically, within the aerospace and defense industry, Mistras in-lab testing and services support OEMs and T1 suppliers through a network of ISO 17025 accredited laboratories with NADCAP and regulatory certification. These core offerings include non-destructive testing, chemical and mechanical analysis, dimensional measurements, machining, and finishing services. These integrated services accelerate time to market for our customers and streamline quality assurance across manufacturing supply chains, which we believe will help provide growth over the remainder of the year and beyond.

Speaker Change: Although we experienced a somewhat slower than anticipated start to 2025 in our two largest end markets.

Speaker Change: We did not experience any significant customer attrition or market share changes in the first quarter and therefore, we are cautiously optimistic for the balance of the year.

Speaker Change: Specifically within the aerospace and defense industry mistrust in lab testing and services support Oem's and tier one suppliers through a network of ISO 17 zero to five accredited laboratories was not cap and regulatory certification these core offerings, including non <unk>.

Speaker Change: Arctic testing chemical and mechanical analysis dimensional measurements machining and finishing services. This integrated services accelerate time to market for our customers and streamline quality assurance across manufacturing supply chain, which we believe will help provide growth.

Speaker Change: Over the remainder of the year and beyond.

Natalia Shuman: That being said, we are closely monitoring potential industry headwinds caused by global market insurgency driven by our customers' reaction to tariffs and other market conditions and the potential impact that could have on our in-lab services business. Again, we are well positioned to maintain market share in the primary industries we serve by leveraging our proprietary advanced technologies and testing methods. We are also focusing on our other existing end markets, such as industrials, infrastructure, and other industries where our testing and inspection services, as well as our data analytics, would enable us to drive growth in the near future.

Speaker Change: That being said we are closely monitoring potential industry headwinds caused by global market uncertainty driven by our customers' reaction to tariffs and other market conditions and the potential impact that could have an hour in lab services business.

Speaker Change: Again, we are well positioned to maintain market share in our primary industries, we serve by leveraging our proprietary advanced technologies and testing methods. We're also focusing on our other existing end markets, such as industrial infrastructure and other initiatives, where our testing and inspection.

Speaker Change: Services as well as our data and analytics will enable us to drive growth in the near future.

Natalia Shuman: I am pleased to highlight the performance of PCMS offering within our Data Solutions Group, where we delivered revenue growth of 6% this quarter as compared to the prior year period.

Speaker Change: I'm pleased to highlight the performance of Pcm's offering within our data solutions group, where we delivered revenue growth of 6% this quarter as compared to the prior year period.

Natalia Shuman: As I have already shared, data solutions, particularly PCMS, is a key area of focus for the company and one in which we are strategically investing time and capital to foster future growth via market share gains.

Speaker Change: As I have already shared data solutions, particularly P. CMS is a key area of focus for the company and one in which we are strategically investing time and capital to foster future growth via market share gains.

Edward Prajzner: Now, I'd like to turn the call over to Ed for an update on our actual financial results for the first quarter of 2025. Thank you, Natalia, and good morning, everyone. As we noted on our Q4 earnings call, as Natalia mentioned earlier, the spring turnaround season in 2024 was robust and the fall turnaround season in 24 was relatively weaker. We stated that we expect the inverse trend in 2025 with a weaker spring and more robust fall turnaround season and this trend materialized in our first quarter results. This is reflected on slide eight. Additionally, our first quarter 24 results benefited from low double-digit growth rates in our two largest end markets, that being oil and gas and aerospace and defense, which provides for a challenging prior year quarter to compare with the current period.

Speaker Change: Now I'd like to turn the call over to Ed for an update on our actual financial results for the first quarter of 2025.

Ed: Thank you Natalia and good morning, everyone.

Ed: As we noted on our Q4 earnings call as <unk> mentioned earlier. This spring turnaround season in 2024 was robust and the fall turnaround season. In 24 was relatively weaker we stated that we expect the inverse trend in 2025 with a weaker spring and more robust fall turnaround season, and this trend materialize.

Ed: In our first quarter results. This is reflected on slide eight.

Ed: Additionally, our first quarter 2004 results benefited from low double digit growth rates in our two largest end markets that being oil and gas and aerospace and defense, which provides for a challenging prior year quarter to compare with the current period.

Edward Prajzner: These trends, coupled with project delays and overall market uncertainty, cause first quarter revenue to lag or expectation. We have continued with our disciplined approach and commitment to only take on contracts that align with our profitability targets. Our international segment revenue was up for the first quarter. nearly 4% organic growth in local currency, which was offset by adverse FX translation. As noted in our press release and as shown on slide 9, our results reflect certain overhead and personnel expenses which have been reclassified in our consolidated statement of operations from SG&A to cost of revenue, as we determined this reclassification would be preferable as it provides greater transparency regarding the true cost of the company's revenue and aligns with how our business is managed.

Ed: These trends coupled with project delays and overall market uncertainty caused first quarter revenue to lag our expectations.

Ed: We have continued with our disciplined approach and commitment to only take on contracts that align with our profitability targets.

Ed: Our international segment revenue was up for the first quarter.

Ed: Nearly 4% organic growth in local currency, which was offset by adverse FX translation.

Ed: As noted in our press release and as shown on slide nine our results reflect certain overhead and personnel expenses, which had been reclassified in our consolidated statement of operations from SG&A to cost of revenue as we determined this reclassification would be preferable as it provides greater transparency regarding <unk>.

Ed: The true cost of the company's revenue and aligns with how our business is managed.

Edward Prajzner: These overhead and personnel costs, which were determined to be directly related to the company's delivery of services, are generally variable to revenue being recognized, and results in gross profit that fully encompasses all costs necessary to generate such revenue. The reclassification recorded within our financials was $6 million and $4.9 million for the three months ended March 31 and March 31, 24, respectively. The impact of this reclassification for full year 24 was approximately $20.9 million from SG&A to cost of revenue. This redistribution of overhead and personnel expenses has no impact on operating income, net income, or adjusted EBITDA comparability.

Ed: These overhead and personnel costs, which were determined to be directly related to the companys delivery of services are generally variable to revenue being recognized and results in gross profit that fully encompasses all cost necessary to generate such revenue.

Ed: Yeah.

Ed: The reclassification recorded within our financials was $6 million and $4 9 million for the three months ended March 31, and March 31 24, respectively.

Ed: Impact of this reclassification for full year 2004 was approximately $29 million from SG&A to cost of revenue. This redistribution of overhead and personnel expenses has no impact on operating income net income or adjusted EBITDA comparability.

Edward Prajzner: selling general and administrative expenses were down $0.6 million or 1.7% from the prior year comparable period despite adverse foreign exchange translation within our SG&A of 0.9 million and strategic spending within our data solutions business. This overall decrease in SG&A reflects our continued cost discipline and focus on calibration of our overhead costs relative to revenue achieved. For the first quarter of 2025, the company recorded $3.1 million of reorganization and other costs related to the continued calibration of the company's support overhead and other related costs. For the first quarter, we reported a GATT net loss of $3.2 million, or $0.10 per share.

Ed: Selling general and administrative expenses were down six.

Ed: $6 million or one 7% from the prior year comparable period, despite adverse foreign exchange translation within our SG&A of $49 million.

Ed: And strategic spending within our data solutions business.

Ed: This overall decrease in SG&A reflects our continued cost discipline and focus on calibration of our overhead costs relative to revenue achieved.

Ed: For the first quarter of 2025, the company recorded $3 1 million of reorganization and other cost related to the continued calibration of the company's support overhead and other related costs.

Ed: For the first quarter, we reported a GAAP net loss of $3 2 million or <unk> 10 per share excluding special items non-GAAP net loss was <unk> 3 million loss or <unk> <unk> per share for the first quarter.

Edward Prajzner: Excluding special items, non-GATT net loss was $0.3 million loss, or $0.01 per share for the first quarter. adjusted EBITDA was down $4.2 million to $12 million as compared to first quarter last year. Despite the tough comparable, our adjusted EBITDA for the first quarter of 2025 was the second highest first quarter adjusted EBITDA performance for the company over the last five years. As shown on slide 10, our net cash provided by operating activities was $5.6 million for the first quarter of 2025, an increase of $5 million compared to the first quarter of last year. are slightly less than break-even free cash flow of $0.2 million is not unusual for the first quarter of any given year, given seasonality.

Ed: Adjusted EBIT was down $4 2 million to $12 million as compared to first quarter last year.

Ed: Despite the tough comparable our adjusted EBIT for the first quarter of 'twenty five was the second highest first quarter adjusted EBIT performance for the company over the last five years.

Ed: <unk>.

Ed: As shown on slide 10, our net cash provided by operating activities was $5 6 million for the first quarter of <unk> 25, an increase of $5 million compared to the first quarter of last year.

Ed: Or slightly less than a breakeven free cash flow of <unk> 2 million is not unusual for the first quarter of any given year given seasonality.

Edward Prajzner: But our free cash flow was improved by just over $5 million for the first quarter of 2025 compared to the prior year quarter. The company remains intently focused on working capital management and meaningful cash flow generation in the second quarter and for the remainder of 2025. Interest expense was $3.3 million for the first quarter, decreasing by $1.1 million, or 25% from the prior year, due to a decrease in the average debt balance outstanding and the lower interest rate environment. Our trailing 12-month bank-defined leverage ratio was just under 2.5 times as of March 31, 2025, which is up slightly from year-end, but still well within our allowable permitted ratio of 3.75.

Ed: But our free cash flow was improved by just over $5 million for the first quarter of <unk> 25, compared to the prior year quarter.

Ed: The company remains intently focused on working capital management and meaningful cash flow generation in the second quarter and for the remainder of 'twenty five.

Ed: Yes.

Ed: Interest expense was $3 3 million for the first quarter decreasing by $1 1 million or 25% from the prior year due to a decrease in the average debt balance outstanding and the lower interest rate environment.

Ed: Our trailing 12 month bank defined leverage ratio was just under two five times as of March 31, 2025, which is up slightly from year end, but still well within our allowable permitted ratio of 375 times.

Edward Prajzner: We have articulated a strategy and continue to emphasize debt reduction as our priority use of free cash flow. However, based on current financial projections, we believe investments in capital expenditures and other resources that support our organic growth strategy, while providing solid returns, additionally represent an excellent use of our free cash flow. As our current leverage ratio is in line with our expectations, we do currently possess optionality as it relates to free cash flows. So we will be balancing these priorities to maximize shareholder value. Our effective tax rate, actually a tax benefit, was 26.9% for the first quarter and we anticipate an effective tax rate of approximately 25% for the full year of 2025.

Ed: We have articulated a strategy and continue to emphasize debt reduction is our priority use of free cash flow.

Ed: However, based on current financial projections, we believe investments in capital expenditures and other resources that support our organic growth strategy, while providing solid returns. Additionally represent an excellent use of our free cash flow.

Ed: As our current leverage ratio is in line with our expectations. We do currently possess optionality as it relates to free cash flows. So we will be balancing these priorities to maximize shareholder value.

Ed: Our effective tax rate actually a tax benefit was 26, 9% for the first quarter and we anticipate an effective tax rate of approximately 25% for the full year 2025.

Edward Prajzner: We sincerely appreciate your continued support and expect to reward your patience with significantly improved results throughout 2025.

Ed: We sincerely appreciate your continued support and expect to reward your patients with significantly improved results throughout 2025.

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. Thank you, Ed. I have been intently focused on developing our five-year group strategic plan and roadmap along our senior leadership team and board of directors. This roadmap is still in progress, but is expected to provide a meaningful path to build upon for continued profitable growth for the company. We are also working closely with our customers and focus on bringing our skilled workforce of technicians and advanced technologists to continue to create value-added solutions wherein we can expect higher margins where there are ROI benefits generated for our customers.

Ed: At this time I would like to turn the call back over to Natalia for closing remarks before we move on to take your questions.

Natalia: Thank you Ed.

Natalia: I have been intensely focused on developing our five year group's strategic plan and roadmap along our senior leadership team and board of directors. This roadmap is still in progress, but is expected to provide a meaningful path to build upon for continued profitable growth for the company. We are also working.

Natalia: Closely with our customers and focus on bringing our skilled workforce of technicians and advanced technologies to continue to create value add solutions. We're in the we can expect higher margins, we have there our ROI benefit generated for our customers.

Natalia Shuman: As a result of this assessment and strategic planning, I am very optimistic about the future of the company and our plan for growing our business across our key end markets and geographies. Our currently undressable market of approximately $25 billion is a large and highly fragmented market that rewards innovative companies who can effectively and expeditiously help their customers keep their assets safe, compliant, and efficiently operating. For 40 years, Mistras has been a key industry leader in non-destructive testing and data analytics that solve these increasingly complex challenges. As we look forward with our long-term strategy, we are striving to become a credible provider in the larger SICK market, and we are committed and focused on creating value for our customers by combining our software, services, and products to provide our customers with the knowledge and insight to operate their critical assets.

Natalia: As a result of these assessments and strategic planning I'm very optimistic about the future of the company and our plans for growing our business across our key end markets and geographies.

Natalia: Our currently addressable market of approximately $25 billion is large and highly fragmented market that rewards innovative companies, who can effectively and expeditiously help their customers keep their assets safe compliant and efficiently operating.

Natalia: For 40 years <unk> has been a key industry leader in non destructive testing and data analytics that solve these increasingly complex challenges as we look forward with our long term strategy, we are striving to become a credible provider in the logic seek market and we are committed and focused.

Natalia: Just on creating value for our customers by combining our software services and products to provide our customers with the knowledge and insight so operate their critical assets.

Natalia Shuman: We will not provide full year guidance for Fiscal 2025 due to unprecedented market uncertainty and while we are still reviewing our entire portfolio of business. We are also assessing the impact of recently enacted tariffs on our business and results for fiscal 2025. Having said that, as a result of our ongoing course calibration discipline, we expect our 2025 Adjusted EBITDA achievement at least meet or exceed the Adjusted EBITDA level achieved in 2024. I am very pleased to be leading Mistras into the future, and I am extremely encouraged by the energy and enthusiasm of my nearly 5,000 dedicated colleagues who believe in our vision and are working tirelessly every day helping us achieve our goals by delivering on our mission for our customers.

Natalia: We will not provide full year guidance for fiscal 2025 due to unprecedented market uncertainty and while we are still reviewing our entire portfolio of businesses. We are also assessing the impact of recently enacted tariffs on our business and results for fiscal 2025.

Natalia: <unk>.

Natalia: Having said that as a result of our ongoing cost calibration discipline, we expect our 2025 adjusted EBITDA achievement at least meet or exceed the adjusted EBITDA level achieved in 2024.

Natalia: I am very pleased to be leading <unk> into the future and I'm extremely encouraged by the energy and enthusiasm of my nearly 5000 dedicated colleagues who believe in our vision and are working tirelessly everyday helping us achieve our goals by delivering on our mission for our customers.

Natalia Shuman: While we have made significant progress, we recognize that there is still much more to be done.

Natalia: While we have made significant progress we recognize that there is still much more to be done. Thank you for being part of this journey. We truly appreciate your continued support.

Natalia Shuman: Thank you for being part of this journey. We truly appreciate your continued support.

Operator: And at this time, I would like to ask the operator to open the call for your questions. We will now begin the Q&A. For today's session, we'll be utilising the Raise Hand feature. If you'd like to ask a question, simply click on the raise hand button at the bottom of your screen. Once you've been called on, please unmute yourself and begin to ask your questions. Thank you. We will now pause a moment to assemble the queue.

Natalia: And at this time I would like to ask the operator to open the call for your questions.

Natalia: We will now begin the Q&A.

Natalia: For today's session, we'll be utilizing the raise hand feature.

Natalia: If you'd like to ask a question simply click on the right hand button at the bottom of your screen.

Natalia: Since you've been called him. Please on mute yourself and begin to ask your question.

Natalia: We will now pause amendments to assemble the queue.

John Franzreb: Your first question comes from the line of John Franzreb of Sidoti and Company. Please unmute and ask your question. Good morning, everyone, and thanks for taking the question. Morning, John. Good morning, John. Okay. Yes, this one. Good morning. Yes, yes, good morning.

Speaker Change: Your first question comes from the line of John <unk> of Sidoti and company.

Natalia: Please on mute and ask your question.

John: Good morning, everyone. Thanks for taking the questions.

John: Good morning, John Good morning, Yes.

John: Yes, just one good morning.

John: Yes, good morning.

Natalia Shuman: I'm kind of curious, um... Today versus, you know, three months ago, can you talk a little bit about the operating environment and what's changed either positively or negatively that wasn't expected going in? Sure, sure.

John: I'm kind of curious.

John: Today versus three months ago can you talk a little bit about the operating environment and what's changed either positively or negatively that wasn't expected going in.

John: Sure sure I can address this question. So obviously, what we've seen in <unk>.

Natalia Shuman: I can address this question. So, obviously, what we've seen as we're working with customers, as we are discussing the customer's situation with the tariffs, and we see unprecedented uncertainty, right? So, the projects being delayed, the customers are still evaluating their impact of tariffs on their business. So, and that's what we see is different from what, you know, what it has been in three months ago. So, the operating environment is quite challenging at this time. And again, we just, you know, using this time wisely, proactively, talking to the customers proactively, working with them, and figuring out the ways to help them.

John: We're working with customers as we are discussing the customers' situation with the with the tariffs and we see unprecedented uncertainty right. So.

John: The projects being delayed the customers are still.

John: <unk> their impact of tariffs on their business, so and that's what we see is different from what you know what.

John: It has been in three months ago. So the operating environment is quite challenging at this time.

John: And again, we just using this time wisely proactively talking to the customers proactively working with them and.

John: Figuring out ways to help them.

Natalia Shuman: So, Natalia, you're actually seeing jobs being pushed to the right meaningfully, and I guess especially I'm kind of curious about data analytics for seeing any kind of projects being stalled or pushed, you know, into later in the year. Actually, data analytics, specifically PCMS segment in our data solution, did quite well. As I mentioned in our prepared remarks, they grew the business 6% in this quarter. So what we've seen is actually more interest from our customers as they very intently focused on the savings and budgetary reductions. There's more interest in our platform that provides more analytics for them to gain that insight to manage their businesses better.

John: So how are you actually seeing jobs being pushed to the right meaningful use and I guess, especially I'm kind of curious about data analytics, we're seeing.

John: Any kind of projects being stalled or pushed and pushed out until later in the year.

John: Actually data and related specifically P. CMS segment and all of data solution did quite well as I mentioned in our prepared remarks. They grew the business 6% in this quarter. So the.

John: What we've seen is actually a more interest from our customers as they very intently focused on the savings and budgetary reductions there there's more interest in our platform that provides more analytics for them to gain that insight to manage their businesses better.

Natalia Shuman: So we are very optimistic, John, about our performance when it comes to data, especially the PCMS platform.

John: So we are very optimistic John on about our performance when it comes to data data, especially the <unk> platform.

John Franzreb: Okay, I just wanted to make sure nothing's been pushed to the right in general.

John: Okay, I just want to make sure nothing has been pushed to the right in general.

John:

John Franzreb: I guess one other question, I'll get back into queue. Can you talk a little bit about your pricing initiative? Sound like in the prepared remarks that you're going back to customers and trying to get value for your, your, your offerings and what you do, how are those discussions working out right now?

John: I guess, one other question and I'll get back into queue can.

John: Can you talk a little bit about.

John: Your pricing initiatives.

John: It sounded like in your prepared remarks that you're going back to customers and trying to get value for your.

John: The offerings and what you do.

John: How are those discussions working out right now can you kind of give us any kind of background.

Natalia Shuman: Can you kind of give us any kind of background? Yeah, thank you, John. The commercial discipline that we have instituted a while ago still remains very much of a focus area for the company. We are reviewing the economics behind our larger customer contracts, and we're determining what levers we can pull in addition to ways to provide more services. And basically, this includes working together with our customers to provide fair and adequate ROI for the services that we provide. So that's on pricing. We do see some price pressure at the moment, as again, there's some pressure from the macroeconomic situation.

John: Yeah.

John: Thank you John the commercial discipline that we have instituted.

John: While ago still remains a very much of a focus area for the company.

John: Reviewing the economics behind our larger customer contracts and we are.

John: Determining what levels levers, we can pull in addition to two ways to provide more more services.

John: And basically this includes working together with our customers to provide fair and adequate ROI for the services that we provide.

John: So that's that's on pricing, we do see some price pressure at the moment is again there is some pressure from the macroeconomic situation. So we're working again with the customers on that but we believe that this commercial discipline that we have continued to serve us well.

Natalia Shuman: So we're working again with the customers on that. But we believe that this commercial discipline that we have continues to serve us well.

John Franzreb: Okay, I'll let somebody else ask some questions. I'll get back to you. Thank you.

John: Okay, I'll, let somebody else ask some questions and get back into queue. Thank you.

Mitch Pinheiro: Our next question will come from Mitch Pinheiro with Sturgey-Vinton Company. Please unmute and ask your questions. Hello, can you hear me? Yes, Mitch. Good morning. Hey, good morning. So Curious, um, specifically what... You know, where you see tariffs affecting the business or your customers' decisions. You know, there is, I mean, everything's on hold or what's on hold. What kind of projects do you talk, do you see being delayed?

Speaker Change: Our next question will come from Mitch can hammer with studies and compare please.

John: Please on mute and ask your question.

Mitch: Hello can you hear me.

John: Yes good.

John: Good morning.

John: Hey, good morning so.

John:

John: I'm curious specifically what.

Speaker Change: Where you see tariffs affecting the business or that your customers' decisions.

Speaker Change: There is I mean, everything is on hold or whatsapp.

Speaker Change: What's on hold.

Speaker Change: What kind of projects do you taught you see being delayed.

Natalia Shuman: Thank you, Mitch. Given that our business that provides essential services to our customers, that what we see is direct impact of mistrust on tariffs is not very significant, but rather the impact is coming from our customers, right? And we're experiencing that impact from tariffs, supply chain disruption, economic policies, you know, those factors causing our customers to pause or delay their spending. And based upon our discussions with the customers, there's still robust demands for our services, but the current economic conditions are hard to predict with our customers to really convert that demand into the actual project.

Speaker Change: Thank you Mitch given that the our business that provides essential services to our customers that what we see direct impacts of MS charts on tariffs is not very significant but rather the impact is coming from our customers right and the.

Speaker Change: We are experiencing that impact from tariff supply chain disruption and economic policies.

Speaker Change: Those those factors, causing our customers to pause or delay their spending.

Speaker Change: And based upon our discussions with customers Theyre still robust demand for our services, but the current economic conditions are hard to predict with our customers to really convert that demand into the actual project.

Natalia Shuman: So that's why we see that softer top line in Q1. So is this mostly... Energy market related, I mean, and I'm just sort of curious, you know, I mean, you know, global demand looks pretty good. I mean, it's, it's, it's, you know, there's some uncertainty, but I don't really see, you know, a lot of things affected by tariffs that probably, you know, will end up being for naught. And it makes it just doesn't. Um, It makes sense that, to me, that energy markets would be affected by tariffs other than, you know... demand here or there for global oil output or something.

Speaker Change: That's why we see that softer top line in Q1.

Speaker Change: So is this mostly.

Speaker Change: Okay.

Speaker Change: Energy market related I mean.

Speaker Change: I'm just sort of curious I.

Speaker Change: Global demand looks pretty good I mean, it's.

Speaker Change: There is some uncertainty, but I don't really see.

Speaker Change: A lot of things affected by tariffs that probably.

Speaker Change: End up being for not.

Speaker Change: And it makes it just doesn't.

Speaker Change:

Speaker Change: It makes sense that that to me that energy.

Speaker Change: Markets would be affected by tariffs other than.

Speaker Change: <unk>.

Speaker Change: Demand here or there for global oil output or something.

Natalia Shuman: It's just a little... Yeah, that's right. And that's what we see, right, that this sort of overall demand is unchanged. So it is temporarily paused as our customers collaborating on the new environment, right? In fact, we're thinking that tariffs in the long run will be beneficial to us, right? Because as the advanced manufacturing moves to the US, we believe that there will be a higher demand for our services overall. So we are quite optimistic about the long term prospects. But again, right now it's temporarily paused when our customers are evaluating their own situation. So it does cause a lot of little ebb and flowing there as the supply chain thinks through demand, supply and tariff impact.

Speaker Change: Just a little.

Speaker Change: Yeah.

Speaker Change: That's right.

Speaker Change: That's what we see right that this sort of overall demand.

Speaker Change: Is unchanged. So it is temporarily pause as our customers calibrating on the new it environment right and in fact, we thinking that tariffs in the long run will be beneficial to our Australia, because as the advanced manufacturing moves to the U S. We believe that there will be a higher demand for.

Speaker Change: Our services overall, so we are quite optimistic about the long term prospects, but again right now is that this is temporarily.

Speaker Change: Temporary pause.

Speaker Change: Our customers are evaluating their own situations. It's a short one uncertainty Mitch our assets are largely north American based they are not subject to the tariffs, but the consumables the raw materials at <unk> through those assets that our customers operate or potentially subjected to supply chain stops and starts theirs.

Speaker Change: Energy is related a crude oil can be cracked and refined in all different byproducts going into lots of different industries, not just as a fuel source. So it does cause a lot of little ebb and flowing there as the supply chain things through demand supply and tariff impacts. So it does have this indirect effect as we tell you said not as much directly on us.

Natalia Shuman: So it does have this indirect effect, as Natalia said, not as much directly on us. Our in lab testing might bring in a source outside of North America. They have to think through that as well. So it's a temporary thing. They're thinking through how it affects them here and now, but longer term, you know, could be a positive to us. What about the price of oil being just below, you know, $60? How does that affect your outlook? Well, obviously, we are depending on oil prices. And the impact of declining crude prices is primarily contained to our downstream business.

Speaker Change: In lab testing might bring in a source outside of North America. They have to think through that as well. So it's a temporary thing they're thinking through how it affects them here and now but longer term it could be a positive to us.

Speaker Change: What about.

Speaker Change: The price of oil being just below.

Speaker Change: $60, how does that affect your outlook.

Speaker Change: Well, obviously, we are depending on oil prices and the impact of declining crude prices as primary campaign until our downstream business and this business our business model is predicated upon our customers' spending behaviors.

Natalia Shuman: And this business, our business model is predicated upon our customer spending behaviors, which obviously, in turn, is potentially impacted by future, you know, oil prices and the duration of these prices changes, right. So there, actually, when we look at the customers, their models are built to flex up and down with the future oil prices. So that's, that's what we see. You know, we certainly have, we see right now that the prices are more of a lower end of normal prices, right? So where, you know, where it's beneficial for us. So and again, that's the impact of to our downstream business.

Speaker Change: Which obviously in turn is potentially impacted by by future.

Speaker Change: Oil prices and their duration during these prices change its right. So theyre actually when we look at the customers. They are their models are built to flex up and down with the future oil prices. So that that's what we see.

Speaker Change: We certainly have we see right now that the prices are more over in the lower end of our normal prices that ISO aware.

Speaker Change: It's beneficial for us so and again thats they impact a lot to our downstream business.

Speaker Change: Okay.

Mitch Pinheiro: Yeah, and then...

Speaker Change: Yeah.

Natalia Shuman: The only thing that really caught my eye is that Midstream, you know, was weak again. And I kind of thought midstream was going to be, you know, more of a steadier revenue picture. Can you talk a little bit about what's happening in the midstream business? Yes, our midstream business, we had some, some reduction in revenue. This is again, mostly because there was some budget restrictions. And although it's regulatory driven, most of our business in midstream is regulatory driven. So we believe that we will catch up on that on that demand later in the year, it just the temporary pause and temporary delay.

Speaker Change: The only thing that really caught my eye is midstream.

Speaker Change: Was weak again and.

Speaker Change: And I kind of thought midstream was will it be.

Speaker Change: More of a steadier revenue picture can you talk a little bit about what's happening in the midstream business.

Speaker Change: Yes, our midstream business, we had some I some reduction in revenue. This is again, mostly because there was some budget restrictions and although its regulatory driven most of our business in midstream is regulatory driven so we believe that we will catch up on that.

Speaker Change: That demand for later in the year is just.

Speaker Change: The temporary pause in temporary delay.

Speaker Change: Okay.

Mitch Pinheiro: And then I think I heard you say that, like, as far as your guidance, you know, I can be formal guidance, but you think that... Was it your adjusted EBITDA to be similar, at a minimum, to last year? Did I hear that correct? That's right. We believe that we at least will meet or exceed our prior year EBITDA levels. So, does that imply... that revenue will be, you know, not too far off from last year, or, you know, because your margins are have improved nicely, but I don't know if they've, you know, they could withstand a big revenue shock.

Speaker Change: And then I think I heard you say that as far as your guidance, you're not giving formal guidance, but you think that.

Speaker Change:

Speaker Change: Is it your adjusted EBITDA to be similar at a minimum to last year is that did I hear that correctly.

Speaker Change: That's right.

Speaker Change: Thats right, we believe that we at least that we will meet or exceed our prior year EBITDA levels.

Speaker Change: So.

Speaker Change: I mean so.

Speaker Change: Does that imply.

Speaker Change: At all of that revenue will be.

Speaker Change: Not too far off from last year or.

Speaker Change: Your margins are have improved nicely, but I don't know if Dave.

Speaker Change: They could withstand a big revenue shocks so for EBITDA to be.

Natalia Shuman: So for AEBDA, you know, flattish, maybe up, would suggest that revenue is not going to be too far off from last year. Is that correct or is there other factors to consider? No, Mitch, I think you're interpreting that correctly. We can't control that end market, you know, demand and our customers buying decisions and when, but yeah, we're definitely signaling a moderation there. However, with our discipline, you know, cost calibrations focus, we can control the bottom line much more, and we fully intend to do that. We have been doing that.

Speaker Change: Flattish to maybe up.

Speaker Change: Would suggest that revenue is not going to be too far off from last year is that correct or is there other factors to consider.

Speaker Change: No Mitch I think youre interpreting that correctly, we can't control that end market.

Speaker Change: <unk> and our customers buying decisions and win but.

Speaker Change: We're definitely signaling a moderation there.

Speaker Change: However, with our disciplined cost calibrations focus we can control the bottom line much more and we fully intend to do that we have been doing that we will continue to do that so that's why we have a lot more confidence in it.

Mitch Pinheiro: We will, you know, continue to do that, so that's why we have a lot more confidence in that EBITDA outlook for the full year. Okay. All right. Great. Thank you. Thanks for taking the question. Thank you, Mitch.

Speaker Change: And that EBITDA outlook for the full year.

Speaker Change: Okay Alright.

Speaker Change: Alright, great. Thank you thanks for taking the questions.

Chris Sakai: Thank you, Manuel. Your next question will come from the line of Chris Sakai with Singular Recent. Please unmute and ask your questions. Yes, hi, good morning. Can you talk about What's happening internationally? What growth is happening there? And do you foresee more growth there? Yes, Chris. International was up about 4% organically, and FX, unfavorable FX translation to U.S. dollars does flatten that out. But International has a fairly diversified business model. They're a lot less oil and gas dependent than North America, much more diversified. They have some of the same macroeconomic challenges that, you know, that we're dealing with, you know, in North America.

Mitch: Mitch Thank you much.

Speaker Change: Your next question will come from the line of Chris Sakai with singular research. Please on mute and ask your question.

Chris Sakai: Yes, hi, good morning.

Hi, Good morning can you talk about.

Speaker Change: What's happening internationally.

Chris Sakai: What growth is happening there.

Speaker Change: And do you foresee more growth there.

Speaker Change: Yes, Chris International was up about 4% organically.

Speaker Change: And FX unfavorable FX translation to U S dollars does flatten that out but international has a fairly diversified business model. There are lot less oil and gas dependent than North America much more diversified they have some of the same macroeconomic challenges that we're dealing with.

Speaker Change: In North America, but.

Edward Prajzner: But more diversified business model for them really probably reduces some of the variability going forward in that they had a really good year in 24 on the top line and bottom line. And we see them having, you know, they're a little less volatile. It's really a function of their much more diverse end markets than we would have in North America.

Speaker Change: More diversified business model for them really probably reduces some of the variability.

Speaker Change: Going forward in that they had a really good year in 24 on the topline and bottom line and we see them having.

Speaker Change: There are a little less volatile it's really a function of they are much more diverse end markets than we would have in North America.

Speaker Change: Okay.

Chris Sakai: Okay, great. Thanks for that.

Speaker Change: Okay, great. Thanks for that.

Natalia Shuman: Looking at midstream and downstream, what sort of things are we to expect to see an uptick there on a macro level? Well, on a macro level, demand, we predict that demand will not change that much. So but again, because of the unknown situation currently and on a macro level, there is some insurgency. So but this is for for oil and gas overall, whether it's downstream or midstream, upstream. So we're seeing that softness currently. But around the around the tariffs around the rules, right? Okay, great. Thanks for the answers. Thank you, Chris.

Speaker Change: Looking at midstream and downstream what sort of things are we.

Speaker Change: So expect to see an uptick there.

Speaker Change: On a macro level.

Speaker Change: Well on a macro level.

Speaker Change: Demand, we predict that demand will not change that much so but again because of the unknown situation currently and on them on a macro level. There is some uncertainty.

Speaker Change: So, but this is for oil and gas overall, whether it's balance sheet or midstream upstream. So we're seeing that softness currently but again, we believe that it will settle down as there is more clarity around their way around the tariffs around the rules try it.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Thanks for those.

Speaker Change: The answers.

Speaker Change: Thank you Chris.

John Franzreb: Your next question will come from John Franzreb with Sudotian Company. Please unmute and ask your question. Yes, I actually got a question about the how April kind of played out. Can you kind of talk to the context of how that played out compared to the March quarter? Is it down the same magnitude? Right. In April, we still impacted a bit of the turnarounds. The number of turnarounds is not as robust, right, as that we saw in H1 of 2024. But we do see some improvement in demand. So it's definitely, again, we're very closely working with the customers to see how we can help and create that greater insight for them using our PCMS mobile application.

Speaker Change: Your next question will come from John <unk> with Sidoti and company. Please on mute and ask your question.

John: Yes, I actually got a question about the.

Speaker Change:

Speaker Change: April kind of played out can you kind of talk to the context for how that played out compared to the March quarter is down the same magnitude.

Speaker Change: Yeah.

Speaker Change: Right.

Speaker Change: In April we are still impacted a bit of their turnarounds they did.

Speaker Change: A number of turnarounds is not as robust right is that we saw in the H one of 'twenty to 'twenty four but we do see some improvement in demand.

Speaker Change: So its definitely we can wave very closely working with the customers to see how we can help and create that greater insight for them using our <unk>.

Speaker Change: <unk> mobile obligations, so, but we see there is a slight improvement in April already.

John Franzreb: But we see there's a slight improvement in April already. So, should we be thinking about the magnitude of the weakness in the second quarter being similar to what we saw in the first quarter at roughly 10%? How should we, you know, contextualize...

Speaker Change: So should we be thinking about the magnitude of the weakness in the second quarter being similar to them and we saw in the first quarter at roughly 10%.

Speaker Change: How should we contextualize.

Speaker Change: Relative weakness on a year over year basis.

Edward Prajzner: Good question, John. Q2 will be a much easier comparison. Q1 to Q1. Q1 last year was so strong, and we did expect a drop-off in the downstream. We had communicated that. Q2 does not have that variability built in there. It's an easier comparison, so you'll see less variability in Q2 versus Q2. So different model. Q1 was just extraordinarily high last year. That's what's causing much of that comparison, the variance. We expected to be down, as we said in the prepared remarks. We were down a little more than we had thought in Q1. But Q2, you'll see a little less, actually a lot less volatility versus expectations.

Speaker Change: Good question, John Q2 will be a much easier comparison Q1 to Q1 Q1 last year was so strong and we did expected drop off in the downstream.

Speaker Change: We have communicated that Q2 does not have that variability built in there. It's an easier comparison, so youll see less variability than we have.

Speaker Change: In Q2 versus Q2, so different different model Q1 was just extraordinarily high last year, that's what's causing much of that comparison the variance we expect it to be down as we said in the prepared remarks, we were down a little more than we thought in Q1, but Q2, you'll see a little a little less actually a lot less volatility versus expectations and.

Speaker Change: When comparing to last year.

Natalia Shuman: And again, comparing to last year, it's not as peaky. Got it. And did I hear it properly that you expected $6.5 million? of Revenue to be Recovered in the Balance of the Year in the Oil and Gas Sector. I don't think you said that it was downstream dependent, but I think it sounded like to me that you were going to get it, you know, through all three end markets. That's correct, John. So what do we expect is what I was talking about turnarounds specifically. So it's we know this several times the turnarounds were softer. So we didn't have as many turnarounds as we had in 2024.

Speaker Change: It's not as not as peaky.

Speaker Change: Yeah.

Speaker Change: Got it and did I hear properly that you expect that $6 5 million.

Speaker Change: Of revenue to be recovered in the balance of the year in the oil and gas sector. I don't think so does this downstream dependent but I think it sounded like to me that youre going to get it through all three end markets.

Speaker Change: That's correct John So what do we expect is what I was talking about turnaround specifically so as we noted several times the turnarounds were softer. So we didn't have as many turnarounds as we had in 2024. However, if we look at the total backlog that we already have.

John Franzreb: However, if we look at the total backlog that we already have for turnarounds planned in H2, we believe that we at least exceeded overall total number and in dollars as well. You know, exceed the level of 24 by 6.5 million. Got it. Okay.

Speaker Change: <unk> four turnarounds planned in H two.

Speaker Change: Believe that we at least exceeded overall total number and in dollars as well exceed the level of 24 by $6 5 million.

Speaker Change: Got it okay. Thank you for taking my follow ups I appreciate it.

John Franzreb: Thank you for taking my follow-up. I appreciate it. Thank you.

Speaker Change: Thank you. Thank you.

Operator: At this time, I see no callers in the queue, so I will hand the call back to Miss Shuman for her closing remarks.

Speaker Change: At this time I see no clause in the queue. So I will hand, the call back to Ms. Shimon for her closing remarks.

Natalia Shuman: Well, thank you very much again for being with us on this journey. And we're very confident in our prospects for the future. And again, thank you to all my team members and our my colleagues for their continuous efforts and hard work in the field. Thank you.

Shimon: Well. Thank you very much again for being with US on this journey and we're very confident in our prospects for the future.

Shimon: And again, thank you to all my team members and our my colleagues for their continuous efforts and hard work in the field. Thank you.

Operator: This ends today's conference call. You may disconnect at this time.

Shimon: This ends today's conference call you may disconnect at this time.