Robust Quarterly Organic Revenue Growth in Aerospace & Defense and Industrial Markets, with a Significant Expansion in quarter-over-quarter Gross Profit Margin of 200 basis points, Generating Net Income of
Second Quarter 2025 Key Figures*
- Revenue of
$185.4 million , a decrease of 2.3%, yet flat giving effect to the exclusion of voluntary Laboratory consolidations - Gross profit of
$53.9 million , up 5.1% or$2.6 million from$51.3 million , primarily due to an improved business mix and operating efficiencies; Gross profit margin of 29.1% as compared to 27.1%, an expansion of 200 basis points - Selling, general, and administrative (“SG&A”) expenses of
$39.8 million , up 10.0% or$3.6 million from$36.2 million , primarily due to foreign exchange loss of$2.8 million - Net income of
$3.0 million and Earnings Per Diluted Share of$0.10 ; Net Income Excluding Special Items (Non-GAAP) of$5.8 million and Diluted Earnings Per Share Excluding Special Items (Non-GAAP) of$0.19 - All-time highest second quarter Adjusted EBITDA of
$24.1 million , compared to$22.1 million , an increase of 8.9%; Adjusted EBITDA margin of 13.0% as compared to 11.7%, an expansion of 130 basis points
*All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted and give effect to the reclassification of certain overhead and personnel expenses in the unaudited condensed consolidated statements of income (loss) from SG&A to cost of revenue. Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about the non-GAAP financial measures set forth in tables attached to this press release.
Second Quarter and First Half 2025 Additional Detailed Highlights:
Second Quarter results reflect the reclassification of certain overhead and personnel expenses in the Unaudited Condensed Consolidated Statements of Income (Loss), from SG&A to cost of revenue, as the Company determined this reclassification provides greater transparency regarding the true cost of the Company’s revenue, and aligns with how the Company's business is managed. These overhead and personnel expenses, 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 the financials was
The Company recorded
Net income was
In the first half of 2025, net cash used in operating activities was
Free cash flow (non-GAAP) was negative
The Company’s gross debt was
The Company’s trailing 12-month total consolidated debt leverage ratio as defined in the Company's credit agreement was just under 2.75 to 1.0 as of
“I am very pleased to report our second quarter performance, which resulted in a record Adjusted EBITDA of
2025 Outlook
The Company is not providing full year guidance for fiscal 2025, as the CEO and renewed senior management team are still reviewing the Company’s entire portfolio of businesses. The Company is also continuously assessing market volatility, including the impact of changes in
Conference Call
In connection with this release, MISTRAS will hold a conference call on
About
INVESTORS CONTACT:
Senior Executive Vice President & Chief Financial Officer
+1 (833) MISTRAS | investors@mistrasgroup.com
Forward-Looking and Cautionary Statements
Certain statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, the impacts of foreign currency exchange risks, the impacts of our new ERP implementation, including the reduction and normalization of our accounts receivable balances, and recently announced tariffs and retaliatory tariffs and changes to
Use of Non-GAAP Financial Measures
In addition to financial information prepared in accordance with generally accepted accounting principles in the
“Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before Special Items (non-GAAP)”, “Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income Excluding Special Items (non-GAAP) and Diluted EPS Excluding Special Items (non-GAAP)” which reconciles the non-GAAP amounts to the GAAP financial measure. The non-GAAP financial performance measure "Income (loss) from operations before special items” is used for each of our three operating segments, the Corporate segment and the "
Unaudited Condensed Consolidated Balance Sheets (in thousands, except share and per share data) | ||||||||
ASSETS | (unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 20,602 | $ | 18,317 | ||||
Accounts receivable, net | 159,823 | 127,281 | ||||||
Inventories | 15,118 | 14,485 | ||||||
Prepaid expenses and other current assets | 18,409 | 12,387 | ||||||
Total current assets | 213,952 | 172,470 | ||||||
Property, plant and equipment, net | 85,909 | 80,892 | ||||||
Intangible assets, net | 39,571 | 39,708 | ||||||
185,125 | 181,442 | |||||||
Deferred income taxes | 6,693 | 6,267 | ||||||
Other assets | 39,793 | 42,259 | ||||||
Total assets | $ | 571,043 | $ | 523,038 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 18,238 | $ | 11,128 | ||||
Accrued expenses and other current liabilities | 90,482 | 85,233 | ||||||
Current portion of long-term debt | 13,069 | 11,591 | ||||||
Current portion of finance lease obligations | 5,677 | 5,317 | ||||||
Income taxes payable | 1,028 | 1,656 | ||||||
Total current liabilities | 128,494 | 114,925 | ||||||
Long-term debt, net of current portion | 176,345 | 158,056 | ||||||
Obligations under finance leases, net of current portion | 15,894 | 15,162 | ||||||
Deferred income taxes | 2,216 | 1,973 | ||||||
Other long-term liabilities | 31,919 | 34,027 | ||||||
Total liabilities | 354,868 | 324,143 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Preferred stock, 10,000,000 shares authorized | — | — | ||||||
Common stock, | 465 | 402 | ||||||
Additional paid-in capital | 253,879 | 250,832 | ||||||
Accumulated deficit | (10,153 | ) | (9,984 | ) | ||||
Accumulated other comprehensive loss | (28,343 | ) | (42,682 | ) | ||||
215,848 | 198,568 | |||||||
Noncontrolling interests | 327 | 327 | ||||||
Total equity | 216,175 | 198,895 | ||||||
Total liabilities and equity | $ | 571,043 | $ | 523,038 | ||||
Unaudited Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | ||||||||||||
Three months ended | Six months ended | |||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||
Revenue | $ | 185,405 | $ | 189,773 | $ | 347,020 | $ | 374,215 | ||||
Cost of revenue | 125,739 | 132,536 | 241,025 | 264,892 | ||||||||
Depreciation | 5,721 | 5,897 | 11,158 | 11,831 | ||||||||
Gross profit | 53,945 | 51,340 | 94,837 | 97,492 | ||||||||
Selling, general and administrative expenses | 39,793 | 36,181 | 75,445 | 72,431 | ||||||||
Reorganization and other costs | 2,951 | 518 | 6,038 | 2,076 | ||||||||
Environmental expense | 518 | — | 1,058 | — | ||||||||
Legal settlement and insurance recoveries, net | — | 60 | — | 60 | ||||||||
Research and engineering | 269 | 231 | 568 | 575 | ||||||||
Depreciation and amortization | 1,986 | 2,391 | 4,312 | 4,839 | ||||||||
Income from operations | 8,428 | 11,959 | 7,416 | 17,511 | ||||||||
Interest expense | 4,239 | 4,413 | 7,563 | 8,842 | ||||||||
Income (loss) before provision (benefit) for income taxes | 4,189 | 7,546 | (147 | ) | 8,669 | |||||||
Provision (benefit) for income taxes | 1,063 | 1,173 | (105 | ) | 1,292 | |||||||
Net income (loss) | 3,126 | 6,373 | (42 | ) | 7,377 | |||||||
Less: net income attributable to noncontrolling interests, net of taxes | 109 | 4 | 127 | 13 | ||||||||
Net income (loss) attributable to | $ | 3,017 | $ | 6,369 | $ | (169 | ) | $ | 7,364 | |||
Net income (loss) per common share | ||||||||||||
Basic | $ | 0.10 | $ | 0.21 | $ | — | $ | 0.24 | ||||
Diluted | $ | 0.10 | $ | 0.20 | $ | — | $ | 0.23 | ||||
Weighted-average common shares outstanding: | ||||||||||||
Basic | 31,439 | 30,979 | 31,268 | 30,842 | ||||||||
Diluted | 31,693 | 31,293 | 31,268 | 31,358 | ||||||||
Unaudited Operating Data by Segment (in thousands) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||
Revenue | |||||||||||||||
$ | 147,992 | $ | 156,394 | $ | 276,894 | $ | 306,743 | ||||||||
International | 39,077 | 34,264 | 72,291 | 67,311 | |||||||||||
Products and Systems | 2,740 | 3,373 | 5,831 | 6,583 | |||||||||||
Corporate and eliminations | (4,404 | ) | (4,258 | ) | (7,996 | ) | (6,422 | ) | |||||||
Total | $ | 185,405 | $ | 189,773 | $ | 347,020 | $ | 374,215 | |||||||
Three months ended | Six months ended | ||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||
Gross profit | |||||||||||||||
$ | 40,384 | $ | 39,874 | $ | 70,549 | $ | 75,250 | ||||||||
International | 12,270 | 9,890 | 21,358 | 19,157 | |||||||||||
Products and Systems | 1,337 | 1,555 | 2,960 | 3,036 | |||||||||||
Corporate and eliminations | (46 | ) | 21 | (30 | ) | 49 | |||||||||
$ | 53,945 | $ | 51,340 | $ | 94,837 | $ | 97,492 | ||||||||
Unaudited Revenues by Category
(in thousands)
Revenue by industry was as follows:
Three Months Ended | International | Products & Systems | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 92,634 | $ | 9,943 | $ | 239 | $ | — | $ | 102,816 | |||||
Aerospace & Defense | 16,848 | 7,014 | 140 | — | 24,002 | ||||||||||
Industrials | 11,647 | 7,597 | 360 | — | 19,604 | ||||||||||
9,320 | 2,097 | 376 | — | 11,793 | |||||||||||
Other | 5,877 | 5,172 | — | — | 11,049 | ||||||||||
Infrastructure, Research & Engineering | 3,461 | 4,020 | 579 | — | 8,060 | ||||||||||
Petrochemical | 3,112 | 1 | — | — | 3,113 | ||||||||||
Other | 5,091 | 3,234 | 1,046 | (4,404 | ) | 4,967 | |||||||||
Total | $ | 147,992 | $ | 39,077 | $ | 2,740 | $ | (4,404 | ) | $ | 185,405 | ||||
Three Months Ended | International | Products & Systems | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 96,356 | $ | 12,735 | $ | 165 | $ | — | $ | 109,256 | |||||
Aerospace & Defense | 16,596 | 5,697 | 47 | — | 22,340 | ||||||||||
Industrials | 11,853 | 5,878 | 563 | — | 18,294 | ||||||||||
7,332 | 1,254 | 447 | — | 9,033 | |||||||||||
Other | 10,368 | 4,504 | 37 | — | 14,909 | ||||||||||
Infrastructure, Research & Engineering | 5,125 | 2,813 | 695 | — | 8,633 | ||||||||||
Petrochemical | 3,848 | 171 | — | — | 4,019 | ||||||||||
Other | 4,916 | 1,212 | 1,419 | (4,258 | ) | 3,289 | |||||||||
Total | $ | 156,394 | $ | 34,264 | $ | 3,373 | $ | (4,258 | ) | $ | 189,773 | ||||
Six Months Ended | International | Products & Systems | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 178,365 | $ | 20,589 | $ | 426 | $ | — | $ | 199,380 | |||||
Aerospace & Defense | 30,855 | 13,295 | 256 | — | 44,406 | ||||||||||
Industrials | 23,335 | 14,114 | 725 | — | 38,174 | ||||||||||
12,544 | 3,082 | 820 | — | 16,446 | |||||||||||
Other | 12,378 | 8,916 | 8 | — | 21,302 | ||||||||||
Infrastructure, Research & Engineering | 7,162 | 6,582 | 1,537 | — | 15,281 | ||||||||||
Petrochemical | 5,635 | 111 | — | — | 5,746 | ||||||||||
Other | 6,620 | 5,602 | 2,059 | (7,996 | ) | 6,285 | |||||||||
Total | $ | 276,894 | $ | 72,291 | $ | 5,831 | $ | (7,996 | ) | $ | 347,020 | ||||
Six Months Ended | International | Products & Systems | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 199,383 | $ | 22,801 | $ | 237 | $ | — | $ | 222,421 | |||||
Aerospace & Defense | 31,971 | 12,429 | 58 | — | 44,458 | ||||||||||
Industrials | 20,762 | 11,731 | 1,000 | — | 33,493 | ||||||||||
10,924 | 2,936 | 1,025 | — | 14,885 | |||||||||||
Other | 18,296 | 8,437 | 76 | — | 26,809 | ||||||||||
Infrastructure, Research & Engineering | 9,097 | 5,018 | 1,104 | — | 15,219 | ||||||||||
Petrochemical | 7,661 | 702 | — | — | 8,363 | ||||||||||
Other | 8,649 | 3,257 | 3,083 | (6,422 | ) | 8,567 | |||||||||
Total | $ | 306,743 | $ | 67,311 | $ | 6,583 | $ | (6,422 | ) | $ | 374,215 | ||||
The Company has retrospectively reclassified certain Oil and Gas sub-category revenues for the periods shown below in order to conform the classification with the current period presentation.
2024 Quarterly Revenues | |||||||||||
Three months ended | Three months ended | Three months ended | Three months ended | ||||||||
Oil and Gas Revenue by sub-category | |||||||||||
Upstream | $ | 39,514 | $ | 41,013 | $ | 40,756 | $ | 36,753 | |||
Midstream | 18,533 | 20,786 | 20,790 | 20,033 | |||||||
Downstream | 55,118 | 47,457 | 37,957 | 40,212 | |||||||
Total | $ | 113,165 | $ | 109,256 | $ | 99,503 | $ | 96,998 |
2025 Quarterly Revenues | ||
Three months ended | ||
Oil and Gas Revenue by sub-category | ||
Upstream | $ | 36,820 |
Midstream | 15,341 | |
Downstream | 44,403 | |
Total | $ | 96,564 |
Three Months Ended | Six Months Ended | ||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||
Oil and Gas Revenue by sub-category | |||||||||||
Upstream | $ | 38,180 | $ | 41,013 | $ | 75,000 | $ | 80,527 | |||
Midstream | 18,575 | 20,786 | 33,916 | 39,319 | |||||||
Downstream | 46,061 | 47,457 | 90,464 | 102,575 | |||||||
Total | $ | 102,816 | $ | 109,256 | $ | 199,380 | $ | 222,421 | |||
Consolidated Revenue by type was as follows:
Three Months Ended | Six Months Ended | ||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||
Revenue by type | |||||||||||
Field Services | $ | 123,484 | $ | 134,528 | $ | 233,659 | $ | 260,883 | |||
15,682 | 16,938 | 30,711 | 34,133 | ||||||||
Data Analytical Solutions | 18,330 | 18,342 | 32,311 | 33,881 | |||||||
Other | 27,909 | 19,965 | 50,339 | 45,318 | |||||||
Total | $ | 185,405 | $ | 189,773 | $ | 347,020 | $ | 374,215 | |||
Unaudited Reconciliation of Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before Special Items (non-GAAP) (in thousands) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||
Income from operations (GAAP) | $ | 16,758 | $ | 18,727 | $ | 23,273 | $ | 32,287 | |||||||
Reorganization and other costs | 1,113 | 92 | 2,471 | 92 | |||||||||||
Legal settlement and insurance recoveries, net | — | 60 | — | 60 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 17,871 | $ | 18,879 | $ | 25,744 | $ | 32,439 | |||||||
International: | |||||||||||||||
Income from operations (GAAP) | $ | 4,004 | $ | 1,647 | $ | 5,085 | $ | 2,771 | |||||||
Reorganization and other costs | 92 | 161 | 270 | 263 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 4,096 | $ | 1,808 | $ | 5,355 | $ | 3,034 | |||||||
Products and Systems: | |||||||||||||||
Income from operations (GAAP) | $ | 336 | $ | 495 | $ | 663 | $ | 809 | |||||||
Reorganization and other costs | — | — | 151 | 2 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 336 | $ | 495 | $ | 814 | $ | 811 | |||||||
Corporate and Eliminations: | |||||||||||||||
Loss from operations (GAAP) | $ | (12,670 | ) | $ | (8,910 | ) | $ | (21,605 | ) | $ | (18,356 | ) | |||
Environmental expense | 518 | — | 1,058 | — | |||||||||||
Reorganization and other costs | 1,746 | 265 | 3,146 | 1,719 | |||||||||||
Loss from operations before special items (non-GAAP) | $ | (10,406 | ) | $ | (8,645 | ) | $ | (17,401 | ) | $ | (16,637 | ) | |||
Income from operations (GAAP) | $ | 8,428 | $ | 11,959 | $ | 7,416 | $ | 17,511 | |||||||
Environmental expense | 518 | — | 1,058 | — | |||||||||||
Reorganization and other costs | 2,951 | 518 | 6,038 | 2,076 | |||||||||||
Legal settlement and insurance recoveries, net | — | 60 | — | 60 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 11,897 | $ | 12,537 | $ | 14,512 | $ | 19,647 | |||||||
Unaudited Summary Cash Flow Information (in thousands) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||
Net cash provided by (used in): | |||||||||||||||
Operating activities | $ | (9,098 | ) | $ | 4,511 | $ | (3,453 | ) | $ | 5,115 | |||||
Investing activities | (6,451 | ) | (5,569 | ) | (11,865 | ) | (11,217 | ) | |||||||
Financing activities | 15,623 | 134 | 14,921 | 5,261 | |||||||||||
Effect of exchange rate changes on cash | 1,992 | 1,246 | 2,682 | 372 | |||||||||||
Net change in cash and cash equivalents | $ | 2,066 | $ | 322 | $ | 2,285 | $ | (469 | ) | ||||||
Unaudited Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP) (in thousands) | |||||||||||||||
Three months ended | Six months ended | ||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||
Net cash provided by operating activities (GAAP) | $ | (9,098 | ) | $ | 4,511 | $ | (3,453 | ) | $ | 5,115 | |||||
Less: | |||||||||||||||
Purchases of property, plant and equipment | (5,870 | ) | (4,795 | ) | (10,425 | ) | (9,599 | ) | |||||||
Purchases of intangible assets | (1,048 | ) | (1,287 | ) | (2,315 | ) | (2,404 | ) | |||||||
Free cash flow (non-GAAP) | $ | (16,016 | ) | $ | (1,571 | ) | $ | (16,193 | ) | $ | (6,888 | ) | |||
Unaudited Trailing Twelve months Free Cash Flow (non-GAAP) (in thousands) | |||
Trailing twelve months ended(1) | |||
Net cash provided by operating activities (GAAP) | $ | 41,561 | |
Less: | |||
Purchases of property, plant and equipment | (18,728 | ) | |
Purchases of intangible assets | (4,995 | ) | |
Free cash flow (non-GAAP) | $ | 17,838 |
_____________
(1) As reported and reconciled for each respective quarterly period during the trailing twelve months ended
Unaudited Reconciliation of Gross Debt (GAAP) to Net Debt (non-GAAP) (in thousands) | ||||||||
Current portion of long-term debt | $ | 13,069 | $ | 11,591 | ||||
Long-term debt, net of current portion | 176,345 | 158,056 | ||||||
Total Debt (Gross) | 189,414 | 169,647 | ||||||
Less: Cash and cash equivalents | (20,602 | ) | (18,317 | ) | ||||
Total Debt (Net) | $ | 168,812 | $ | 151,330 | ||||
Unaudited Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP) (in thousands) | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||
Net income (loss) (GAAP) | $ | 3,126 | $ | 6,373 | $ | (42 | ) | $ | 7,377 | |||||
Less: Net income attributable to non-controlling interests, net of taxes | 109 | 4 | 127 | 13 | ||||||||||
Net income (loss) attributable to | $ | 3,017 | $ | 6,369 | $ | (169 | ) | $ | 7,364 | |||||
Interest expense | 4,239 | 4,413 | 7,563 | 8,842 | ||||||||||
Income tax (benefit)/expense | 1,063 | 1,173 | (105 | ) | 1,292 | |||||||||
Depreciation and amortization | 7,707 | 8,288 | 15,470 | 16,670 | ||||||||||
Share-based compensation expense | 1,827 | 1,536 | 3,129 | 2,764 | ||||||||||
Reorganization and other related costs(1) | 2,951 | 518 | 6,038 | 2,076 | ||||||||||
Environmental expense | 518 | — | 1,058 | — | ||||||||||
Legal settlement and insurance recoveries, net | — | 60 | — | 60 | ||||||||||
Foreign exchange loss (gain) | 2,784 | (227 | ) | 3,157 | (789 | ) | ||||||||
Adjusted EBITDA (non-GAAP) | $ | 24,106 | $ | 22,130 | $ | 36,141 | $ | 38,279 |
_______________
(1) For the three months ended
Unaudited Reconciliation of Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income (Loss) Excluding Special Items (non-GAAP) and Diluted EPS Excluding Special Items (non-GAAP) (tabular dollars in thousands, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2025 | 2024 | 2025 | 2024 | ||||||||||||
Net income (loss) attributable to | $ | 3,017 | $ | 6,369 | $ | (169 | ) | $ | 7,364 | ||||||
Special items | 3,469 | 578 | 7,096 | 2,136 | |||||||||||
Tax impact on special items | (720 | ) | (140 | ) | (1,501 | ) | (521 | ) | |||||||
Special items, net of tax | $ | 2,749 | $ | 438 | $ | 5,595 | $ | 1,615 | |||||||
Net income attributable to | $ | 5,766 | $ | 6,807 | $ | 5,426 | $ | 8,979 | |||||||
Diluted EPS (GAAP)(1) | $ | 0.10 | $ | 0.20 | $ | — | $ | 0.23 | |||||||
Special items, net of tax | 0.09 | 0.01 | 0.18 | 0.05 | |||||||||||
Diluted EPS Excluding Special Items (non-GAAP) | $ | 0.19 | $ | 0.21 | $ | 0.18 | $ | 0.28 |
_______________
(1) For the three months ended

Source: MISTRAS Group, Inc.