Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mattr Corp (MTTRF, Financial) reported consolidated revenue of $250 million and adjusted EBITDA of $37 million for Q3 2024, indicating strong financial performance.
- The company completed the establishment of two new manufacturing sites in its composite technologies segment, enhancing production capabilities.
- Mattr Corp (MTTRF) announced the planned acquisition of AmerCable, expected to be immediately and materially accretive, positioning the company for robust growth in the North American wire and cable market.
- The company is on track to complete its operational transformation by the end of 2024, setting a strong foundation for 2025.
- Mattr Corp (MTTRF) continues to capture market share in its product lines, particularly in the Flexpipe business, despite challenging market conditions.
Negative Points
- The company observed continued weakness in the North American onshore oilfield market, Eurozone industrial sector, and global automotive market, which is expected to persist into 2025.
- Q3 revenue from the composite technologies segment decreased by 2.7% compared to the same period in 2023, primarily due to decreased international Flexpipe sales.
- Adjusted EBITDA from continuing operations decreased by 26.9% year-over-year, attributed to changes in product and customer mix and lower utilization in manufacturing facilities.
- The company incurred severance expenses and expects further costs in Q4 as it adjusts its fixed cost base to reflect market conditions.
- Mattr Corp (MTTRF) anticipates Q4 2024 revenue to be the lowest of the year due to seasonal slowdowns and unfavorable macroeconomic drivers.
Q & A Highlights
Q: Do you expect all restructuring costs to be wrapped up by Q4, with the $20 million cost savings showing up in 2025?
A: Yes, that's the right way to think about it. β Michael Reeves, President, Chief Executive Officer, Director
Q: With the new Flexpipe facility opening, is the staffing reduction more focused on legacy smaller pipe products?
A: Yes, the focus is on ensuring our fixed cost base is appropriate, which involves balancing production between the Calgary site and the new Texas site. The majority of cost reduction is about the fixed cost base. β Michael Reeves, President, Chief Executive Officer, Director
Q: Can you explain the working capital build this year and expectations for Q4 and 2025?
A: The working capital build was primarily related to international receivables and inventory build in the Flexpipe business. We expect Q4 to be our best working capital quarter, releasing some working capital. β Tom Holloway, Chief Financial Officer, Senior Vice President - Finance
Q: Is the ramp-up to run rate revenue for composite technologies facilities taking longer than expected?
A: Yes, due to changes in market activity levels, particularly in the onshore North American oilfield market. The ramp-up in Texas is slower than expected, but the economics remain favorable. The Xerxes site in South Carolina is on track. β Michael Reeves, President, Chief Executive Officer, Director
Q: How material is the impact of recent hurricanes on Q4, and will it spill over into 2025?
A: The impact in Q4 is likely nominal, with some projects pushed into the next construction season, but it's not expected to be material. β Michael Reeves, President, Chief Executive Officer, Director
Q: How will the closure of stores by a major fuel tank customer impact your business?
A: The closure of existing sites doesn't impact us as much as new construction does. Our customer base signals a desire to build more stores in 2025, which bodes well for demand. β Michael Reeves, President, Chief Executive Officer, Director
Q: What impact would a broad import tax have on your business, given the US election outcome?
A: We are well-positioned to navigate potential tariffs, particularly on Chinese-made products. We expect higher infrastructure construction activity, which is favorable for our businesses. β Michael Reeves, President, Chief Executive Officer, Director
Q: Can you provide clarity on Q4 guidance across business lines, excluding MEO and severance costs?
A: Revenue is expected to be the lowest of 2024 due to seasonal slowing and customer budget exhaustion. EBITDA will generally move in line with revenue, excluding specific impacts. β Michael Reeves, President, Chief Executive Officer, Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
