Mattr (MATR) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue reached CAD 254 million ($254 million), with Adjusted EBITDA of CAD 43 million ($42.8 million) and Adjusted EPS of $0.31, reflecting a 1.4% year-over-year increase and strong sequential growth despite market and geopolitical challenges.

• Composite Technologies set a new quarterly revenue record at $153 million, while Connection Technologies revenue was stable at $89 million.

• Modernization, expansion, and optimization (MEO/MFO) projects remain on time and on budget, with new production sites in Texas and South Carolina commencing operations post-quarter.

• Net debt to Adjusted EBITDA ratio at 0.23x, with strong liquidity and renewed NCIB for shareholder returns.

• The company aims to double revenue by 2030 and drive EBITDA margins above 20%, supported by new production sites and strategic programs.

Financial highlights

• Q2 2024 consolidated revenue from continuing operations was $253.9 million, up 1.4% year-over-year; Adjusted EBITDA was $42.8 million, down year-over-year due to $7.9 million in MEO/MFO costs.

• Composite Technologies revenue rose 1.4% to $152.5 million, but Adjusted EBITDA fell 20.9% due to increased MEO/MFO costs and a less favorable product mix.

• Connection Technologies revenue was $88.8 million, with Adjusted EBITDA down due to lower stock product shipments and the absence of a large aerospace order.

• Cash and cash equivalents stood at $253.6 million as of June 30, 2024, with net debt to Adjusted EBITDA at 0.23x.

• Capital expenditures in Q2 were $29.4 million, with 2024 capex expected at $90–100 million.

Outlook and guidance

• Q3 2024 revenue is expected to rise modestly, mainly from Connection Technologies, but Adjusted EBITDA is projected to be below Q2 2024 due to revenue mix and Flexpipe shipment timing.

• Full-year 2024 revenue is projected to increase over 2023, with underlying profitability (excluding MEO/MFO costs) similar to last year.

• MEO/MFO costs in Composite Technologies are expected to decline in H2 2024, while Connection Technologies will see a peak in MEO/MFO costs in Q4 2024.

• 2025 demand indicators remain favorable, with expectations for margin recovery in Connection Technologies and robust growth in Xerxes.

• Management remains optimistic about mid- and long-term market trends, citing robust infrastructure demand.