An approach to identify damages in materials particularly aerospace composites has been developed based on application of wavelet analysis on guided wave transient signals. The wave response was convoluted against a suitable wavelet to present information in the time-frequency domain for baseline comparison of signals. By evaluating the time-frequency conditional moment, sensitive indices were computed to identify the presence of damage. Normalisation of these indices was found to be an important procedure to reduce measurement discrepancies from baseline comparison. Extending this further was the correlation of these parameters to pulse propagation time from actuator to sensor positions to generate a tomographic representation of the damage in the scanned material. These damage evaluation processes were investigated in an ultrasonic health monitoring system inspecting carbon fibre reinforced composite panels with simulated delamination. The imaging results displayed positive damage characterisation capabilities for implementation within the methodology of smart or intelligent materials.