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Jun 30, 2020
Mistras Q2 2020 Earnings Report
Reported a decrease in revenue but an increase in gross profit margin and free cash flow.
Key Takeaways
Mistras Group's Q2 2020 results showed a decrease in revenue by 38% to $124.4 million, but a significant increase in free cash flow by 284% to $25.5 million. The company also achieved its highest quarterly gross profit margin in over five years, expanding to 33.1%.
Revenue decreased by 38% to $124.4 million.
Free cash flow increased by 284% to $25.5 million.
Gross profit margin expanded to 33.1%, the highest in over five years.
Debt repayment was a quarterly record at $18.8 million.
Mistras
Mistras
Mistras Revenue by Segment
Revenue by Segment
International Revenue
CapyFin.comProducts and Systems Revenue
CapyFin.com Forward Guidance
The Company anticipates a high-teen up to 20% sequential improvement in revenues for the third quarter of 2020 compared to the second quarter, but down from the year ago quarter. The Company believes that consolidated revenue in the second half of 2020 will be higher than the first half of 2020, with a progressive improvement in adjusted EBITDA and continuing positive free cash flow in the second half of 2020.
Positive Outlook
- Anticipates a high-teen up to 20% sequential improvement in revenues for the third quarter of 2020 compared to the second quarter
- Consolidated revenue in the second half of 2020 will be higher than the first half of 2020
- Progressive improvement in adjusted EBITDA in the second half of 2020
- Continuing positive free cash flow in the second half of 2020
- Stabilization in the crude oil markets and the continuing relaxation of certain stay-in-place mandates are allowing some of our energy industry customers to start projects in the third quarter that were delayed earlier in the year.
Challenges Ahead
- Ongoing COVID-19 pandemic continues to impact the Company’s two largest markets, Oil & Gas and Aerospace.
- Anticipates a high-teen up to 20% sequential improvement in revenues for the third quarter of 2020 compared to the second quarter, but down from the year ago quarter.
- Extremely difficult to forecast with any degree of certainty at this time
- Outlook is contingent on continuing macroeconomic stability, including the recent recovery in the crude oil markets and the ongoing relaxation of certain stay-in-place mandates.
- Second quarter revenues were down from a year ago in what we still believe is likely to be this years’ trough quarter, primarily due to the slowdown in inspection activity resulting from our clients’ prioritization of safety precautions precipitated by the rapid onset of COVID-19, as well as more cautionary customer budgeting.
Revenue & Expenses
Visualization of income flow from segment revenue to net income