Loading...
01/11 03:18
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates strong financial performance with revenue and EBITDA growth, margin expansion, and improved liquidity. The strategic partnership with Stellex Capital Management and focus on high-margin industries further bolster the outlook. Despite some risks, such as macroeconomic uncertainty and working capital challenges, the positive guidance and strategic initiatives suggest a positive stock price movement over the next two weeks.
Revenue Revenue grew almost 7% or about $14 million year-over-year, driven by strong Nested and Call-out activity in the U.S. and 8.9% growth in International operations, including Canada.
Gross Margin Gross margin increased by 8.4% year-over-year, attributed to ongoing cost and margin improvement initiatives.
Adjusted EBITDA Adjusted EBITDA increased by 28.6% year-over-year, reaching the highest level for a third quarter since at least 2016, due to cost and margin improvement initiatives.
Inspection and Heat-Treating (IHT) Revenue IHT segment revenue grew by 5.7% year-over-year, driven by strong Nested and Call-out activity in the U.S. and 8.9% growth in International operations, including Canada.
Mechanical Services (MS) Revenue MS segment revenue grew by 7.8% or $8 million year-over-year, led by increased turnaround demand in U.S. operations and improved performance in Canada.
Adjusted EBITDA Margin Adjusted EBITDA margin increased by 110 basis points to 6.5% of consolidated revenue year-over-year, due to cost control and margin expansion initiatives.
Adjusted Selling, General and Administrative Expense Adjusted SG&A expense decreased to 20.8% of consolidated revenue from 21.7% in Q3 2024, reflecting cost discipline.
Liquidity Liquidity increased to $57.1 million as of September 30, 2025, consisting of $10.6 million in unrestricted cash and $46.5 million in undrawn credit availability, supported by a $75 million private placement and debt reduction.
Year-to-Date IHT Revenue Growth IHT segment delivered 9.4% year-over-year growth for the first 9 months of 2025, driven by strong operational performance.
Year-to-Date MS Revenue Growth MS segment delivered just under 1% year-over-year growth for the first 9 months of 2025, contributing to a combined $33 million additional revenue year-over-year.
Year-to-Date Adjusted EBITDA Adjusted EBITDA improved by 12% or about $5 million year-over-year for the first 9 months of 2025, attributed to cost discipline and higher-margin work.
Adjusted Net Loss Adjusted net loss decreased by almost $7 million year-over-year for the first 9 months of 2025, reflecting improved financial performance.
Revenue growth in Inspection and Heat-Treating (IHT): 5.7% overall revenue growth driven by strong Nested and Call-out activity in the U.S. and 8.9% growth in international operations, including Canada.
Revenue growth in Mechanical Services (MS): 7.8% growth led by increased turnaround demand in U.S. operations and improved performance in Canada.
Cost and margin improvement initiatives: Adjusted EBITDA increased by 28.6% year-over-year, with adjusted EBITDA margin up 110 basis points to 6.5% of consolidated revenue. Adjusted selling, general, and administrative expenses reduced to 20.8% of revenue from 21.7% in Q3 2024.
Balance sheet improvements: Completed $75 million private placement with Stellex Capital Management, reducing debt by $67 million and increasing liquidity to $57.1 million. Refinanced loans to lower interest rates and extended maturities to 2030.
Strategic partnership with Stellex Capital Management: $75 million investment to enhance financial flexibility and accelerate value creation plan.
Focus on high-margin industries: Targeting power, aerospace, and LNG markets to leverage technical expertise and increase wallet share.
Macroeconomic Uncertainty: The company acknowledges the potential challenges posed by macroeconomic uncertainty, which could impact their diversified portfolio of service offerings and geographic footprint.
Working Capital Challenges: Negative working capital trends, particularly around accounts receivable and payables, have adversely affected free cash flow generation in 2025.
Non-Recurring Fees: Non-recurring refinancing and transaction fees have negatively impacted free cash flow in 2025.
Interest Rate and Debt Management: Although refinancing has improved the balance sheet, the company remains exposed to interest rate risks and the need for effective debt management.
Seasonal Demand Pressures: Seasonal spring and fall demands on working capital could strain financial flexibility.
Strategic Execution Risks: The company’s ability to execute its strategic vision, including cost control, margin expansion, and top-line growth, remains critical to achieving its financial and operational goals.
Revenue Growth: The company expects full-year 2025 revenue growth of approximately 5%.
Adjusted EBITDA Growth: Forecasted approximately 13% growth in adjusted EBITDA for the full year 2025.
Margin Expansion: Continued focus on cost discipline and growing higher-margin work to achieve an adjusted EBITDA target margin of at least 10%.
Free Cash Flow: Expecting fewer non-recurring professional fees and reversal of adverse working capital trends in Q4 2025, which should improve free cash flow generation.
Geographic and Segment Performance: Anticipates continued improved performance from Canadian and other international operations, as well as growth in both Inspection and Heat-Treating (IHT) and Mechanical Services (MS) segments.
Strategic Focus: Plans to leverage technical expertise in high-margin end markets such as power, aerospace, and LNG to drive growth and increase wallet share.
Operational Improvements: Ongoing actions to improve cost efficiencies and accelerate top-line growth are expected to impact full-year 2026 results positively.
The selected topic was not discussed during the call.
The earnings call summary indicates strong financial performance with revenue and EBITDA growth, margin expansion, and improved liquidity. The strategic partnership with Stellex Capital Management and focus on high-margin industries further bolster the outlook. Despite some risks, such as macroeconomic uncertainty and working capital challenges, the positive guidance and strategic initiatives suggest a positive stock price movement over the next two weeks.
The earnings call reflects positive sentiment due to strong revenue growth, improved margins, and cost savings initiatives. Despite international revenue challenges, U.S. operations showed resilience. Management's optimistic guidance for adjusted EBITDA growth and successful cost reduction efforts further boost confidence. The Q&A section did not reveal significant negative concerns. However, macroeconomic uncertainties and execution risks from transformation initiatives are noted. Overall, the positive financial performance and strategic initiatives suggest a positive stock price movement over the next two weeks.
The earnings call reflects mixed signals: strong revenue growth in midstream markets and a successful refinancing are positive, but overall revenue was flat, and operational challenges persist. The share repurchase program is a positive, yet uncertainties remain due to project delays and regulatory risks. The Q&A highlighted improvements in EBITDA and cost savings, but also noted an adjusted net loss. With flat revenue and mixed guidance, the stock price is likely to remain relatively stable, resulting in a neutral sentiment.
The earnings call presents a mixed picture: positive aspects include strategic roadmap progress, cost savings, and a 15% growth in certain segments. However, flat overall revenue, an adjusted net loss, and vague guidance in the Q&A raise concerns. Risks such as supply chain issues and regulatory impacts further complicate the outlook. Given the lack of clear guidance and ongoing financial challenges, the sentiment is neutral, with no significant short-term catalysts for a strong positive or negative movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
