Mistras Group, Inc. (NYSE:MG), a leading "one source" global
provider of technology enabled asset protection solutions, today
reported financial results for its fiscal first quarter ending
August 31, 2010.
Key Highlights for Fiscal Q1-2011 results
included:
- Revenue for the first quarter of fiscal 2011 was $68.4 million,
representing a 22% increase over the comparable quarter in 2010
with revenues of $56.1 million.
- Adjusted EBITDA*, a non-GAAP measure detailed later in this
release, grew by 21% to $8.5 million in the first quarter of fiscal
2011 versus $7.0 million in the first quarter of fiscal 2010.
- Net income for the first quarter of fiscal 2011 was $1.6
million, or $.06 per diluted share, up from $0.8 million, or $.04
per diluted share, in the first quarter of fiscal 2010.
- The Company generated $8.3 million in net cash from operating
activities in the first quarter of fiscal 2011, versus $5.5 million
in the first quarter of fiscal 2010, representing an increase of
51%.
Revenue growth of 22% in the fiscal first quarter was driven by
15% organic growth, 8% acquisition growth and was partially offset
by a decrease of less than 1% related to the impact of foreign
currency. During the first quarter of fiscal 2011, the Company
achieved revenue growth across all of its segments, including gains
of 21% in the Services Segment, 46% in the Products and Systems
segment and 17% in the International segment.
Net Income during the first quarter of 2011 included a legal
provision of $0.3 million as compared to a $0.3 million reversal of
a legal provision in the first quarter of 2010. In addition, net
income for the first quarter of 2011 included $0.7 million in stock
compensation compared to $0.3 million in the first quarter of 2010.
Both of these expense classifications are included in the
calculation of Adjusted EBITDA*. The company uses Adjusted EBITDA*
as a key measure of its business because management believes that
it better reflects the results of its core operations.
Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos
stated that, "We are extremely pleased with our performance in the
first quarter of fiscal 2011. We continue to deliver double digit
growth in revenues, EBITDA and net income, which is unique in our
industry. These results are a testament to our 'one source' value
proposition of technology-enabled services, proprietary products
and systems and enterprise inspection software. Mistras continues
to be an industry pace setter, increasingly delivering value and
predictability for the industrial and public infrastructure that we
serve. We are delighted that during the first quarter, several new
customers have trusted Mistras to outsource the inspection of their
valuable assets resulting in multiple multi-year run and maintain
evergreen contracts."
Business Outlook for Fiscal 2011:
The Company is forecasting continued double digit growth in
Revenues and Adjusted EBITDA* for Fiscal 2011. The Company is
affirming its previously issued guidance and projects its fiscal
2011 revenues to be in the range of $300 million to $330 million
and Adjusted EBITDA* to be in the range of $44 million to $49
million. These projections anticipate continued organic growth
supplemented by acquisitions, as well as an improvement in the
Company's profitability. Mistras does not provide specific guidance
for individual quarters, but will reaffirm or update our annual
guidance at least quarterly.
Conference Call to Discuss First Quarter
Results
Mistras will have a conference call on Wednesday, October 13,
2010 at 9:00 am Eastern Time to discuss its results for the first
quarter of fiscal year 2011. The call will be broadcast over the
Web and can be accessed on Mistras' Website, www.mistrasgroup.com.
Individuals in the U.S. wishing to participate in the conference
call by phone may call 866-831-6162 and use confirmation code
65923895 when prompted. The International number is 617-213-8852.
Those who wish to listen to the call later can access an archived
copy of the conference call at the Mistras Website.
About Mistras Group, Inc.
Mistras offers one of the broadest "one source" services and
technology-enabled asset protection solution portfolios in the
industry used to evaluate the structural integrity of energy,
industrial and public infrastructure. Mission critical services and
solutions are delivered globally and provide customers with the
ability to extend the useful life of their assets, improve
productivity and profitability, comply with government safety and
environmental regulations and enhance risk management operational
decisions.
Mistras uniquely combines its industry leading products and
technologies - 24/7 on-line monitoring of critical assets;
mechanical integrity ("MI") and non-destructive testing ("NDT")
services; and its proprietary world class data warehousing and
analysis software - to provide comprehensive and competitive
products, systems and services solutions from a single source
provider.
For more information, please visit the company's website at
www.mistrasgroup.com or contact Frank Joyce, Chief Financial
Officer at 609-716-4103.
The Mistras Group, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6966
Forward-Looking and Cautionary Statements
Certain statements made in this press release are
"forward-looking statements" about Mistras' financial results and
estimates, products and services, business model, strategy, growth
opportunities, profitability and competitive position. These
forward-looking statements generally use words such as "future,"
"possible," "potential," "targeted," "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "predict," "project,"
"will," "may," "should," "could," "would" and other similar words
and phrases. Such statements are not guarantees of future
performance or results, and will not necessarily be accurate
indications of the times at, or by which, such performance or
results will be achieved, if at all. These statements are subject
to risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in these
statements. Important factors that could cause such differences
include, but are not limited to, current economic conditions; loss
of or reduction in business with a significant customer; adverse
change in the industries Mistras serves, which include oil and gas,
power transmission and generation, chemical, aerospace and
infrastructure; market acceptance of Mistras' products and
services; significant changes in the competitive environment;
catastrophic events that cause disruptions to the business of
Mistras or its customers; the ability to attract and train
engineers, scientists, and skilled technicians; and any accidents
or incidents involving the Company's services or asset protection
solutions. A further list, description and discussion of these and
other risks and uncertainties can be found in the "Risk Factors"
section of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission on August 17, 2010.
You should consider these factors in evaluating the
forward-looking statements included in this press release and not
place undue reliance on such statements. The forward-looking
statements are made as of the date hereof, and Mistras undertakes
no obligation to update such statements as a result of new
information, future events or otherwise.
* Use of Non-GAAP Measures
The term "Adjusted EBITDA" is a financial measurement not
calculated in accordance with U.S. generally accepted accounting
principles. The Company believes that investors and other users of
the financial statements benefit from the presentation of Adjusted
EBITDA because it provides an additional metric to compare the
Company's operating performance on a consistent basis and measure
underlying trends and results of the Company's business. An
explanation of Adjusted EBITDA and a reconciliation of this to a
financial measurement under GAAP are set forth in a table attached
to this press release.
Mistras Group,
Inc. |
Unaudited Consolidated
Balance Sheets |
(in thousands, except
share and per share data) |
|
|
|
|
|
|
|
August 31, 2010 |
May 31, 2010 |
ASSETS |
|
|
Current Assets |
|
|
Cash and cash
equivalents |
$ 13,855 |
$ 16,037 |
Accounts receivable, net |
51,877 |
54,721 |
Inventories, net |
8,982 |
8,736 |
Deferred income taxes |
2,272 |
2,189 |
Prepaid expenses and other current
assets |
5,334 |
5,292 |
Total current assets |
82,320 |
86,975 |
Property, plant and equipment, net |
40,469 |
39,981 |
Intangible assets, net |
17,695 |
16,088 |
Goodwill |
47,622 |
44,315 |
Other assets |
204 |
1,273 |
Total assets |
$ 188,310 |
$ 188,632 |
|
|
|
LIABILITIES, PREFERRED STOCK AND
EQUITY |
|
|
Current liabilities |
|
|
Current portion of long-term debt |
$ 6,579 |
$ 6,303 |
Current portion of capital lease
obligations |
5,219 |
5,370 |
Accounts payable |
4,553 |
4,640 |
Accrued expenses and other current
liabilities |
19,263 |
20,090 |
Income taxes payable |
2,332 |
3,281 |
Total current liabilities |
37,946 |
39,684 |
Long-term debt, net of current portion |
6,441 |
5,691 |
Obligations under capital leases, net of
current portion |
8,467 |
9,199 |
Deferred income taxes |
2,032 |
2,087 |
Other long-term liabilities |
662 |
1,417 |
Total liabilities |
55,548 |
58,078 |
|
|
|
Commitments and contingencies |
|
|
Preferred stock, 10,000,000 shares
authorized |
-- |
-- |
Equity |
|
|
Common stock, $0.01 par value,
200,000,000 shares authorized, 26,664,254 and 26,663,528 shares
issued and outstanding as of August 31, 2010 and May 31, 2010,
respectively |
267 |
267 |
Additional paid-in capital |
162,783 |
162,054 |
Accumulated deficit |
(28,856) |
(30,448) |
Accumulated other comprehensive loss |
(1,797) |
(1,587) |
Total Mistras Group, Inc. stockholders'
equity |
132,397 |
130,286 |
Noncontrolling interest |
365 |
268 |
Total equity |
132,762 |
130,554 |
Total liabilities, preferred stock and
equity |
$ 188,310 |
$ 188,632 |
|
|
Mistras Group,
Inc. |
Unaudited Consolidated
Statement of Operations |
(in thousands, except
per share data) |
|
|
|
|
For the
three months ended August 31, |
|
2010 |
2009 |
Revenues: |
|
|
Services |
$ 61,252 |
$ 51,656 |
Products |
7,158 |
4,433 |
Total revenues |
68,410 |
56,089 |
Cost of Revenues: |
|
|
Cost of services |
41,391 |
34,369 |
Cost of goods sold |
3,277 |
2,099 |
Depreciation of services |
2,809 |
2,280 |
Depreciation of products |
155 |
191 |
Total cost of
revenues |
47,632 |
38,939 |
Gross profit |
20,778 |
17,150 |
Selling, general and administrative
expenses |
15,479 |
13,133 |
Research and engineering |
555 |
483 |
Depreciation and amortization |
1,178 |
1,045 |
Legal reserve |
250 |
(297) |
Income from operations |
3,316 |
2,786 |
Other expenses |
|
|
Interest expense |
690 |
1,064 |
Loss on extinguishment of long-term debt |
-- |
169 |
Income before provision for income taxes
and noncontrolling interest |
2,626 |
1,553 |
Provision for income taxes |
1,054 |
694 |
Net income |
1,572 |
859 |
Net loss (income) attributable to
noncontrolling interests, net of taxes |
20 |
(44) |
Net income attributable to common
stockholders |
$ 1,592 |
$ 815 |
Earnings per common share: |
|
|
Basic |
$ 0.06 |
$ 0.06 |
Diluted |
$ 0.06 |
$ 0.04 |
Weighted average common shares
outstanding: |
|
|
Basic |
26,664 |
13,000 |
Diluted |
26,778 |
20,435 |
|
|
Mistras Group,
Inc. |
Unaudited Operating
Data by Segment |
(in
thousands) |
|
|
|
|
Three
months ended August 31, |
|
2010 |
2009 |
|
|
|
Revenues |
|
|
Services |
$ 55,282 |
$ 45,702 |
Products and Systems |
5,310 |
3,625 |
International |
9,040 |
7,751 |
Corporate and
eliminations |
(1,222) |
(989) |
|
$ 68,410 |
$ 56,089 |
|
|
|
|
|
|
|
Three
months ended August 31, |
|
2010 |
2009 |
|
|
|
Gross
profit |
|
|
Services |
$ 15,001 |
$ 12,528 |
Products and Systems |
2,569 |
1,688 |
International |
3,271 |
3,046 |
Corporate and
eliminations |
(63) |
(112) |
|
$ 20,778 |
$ 17,150 |
|
|
Mistras Group,
Inc. |
Unaudited
Reconciliation of Net Income Attributable to Common Shareholders to
EBITDA and Adjusted EDITDA |
(in
thousands) |
|
|
|
|
For the
three months ended August 31, |
|
2010 |
2009 |
|
|
|
Net income attributable to Common
Shareholders |
$ 1,592 |
$ 815 |
Interest expense |
690 |
1,064 |
Provision for income taxes |
1,054 |
694 |
Depreciation and amortization |
4,142 |
3,516 |
EBITDA |
7,478 |
6,089 |
Stock compensation expense |
729 |
250 |
Legal reserve |
250 |
(297) |
Large customer bankruptcy |
-- |
767 |
Loss on extinguishment of debt |
-- |
169 |
Adjusted EBITDA |
$ 8,457 |
$ 6,978 |
"Adjusted EBITDA" is defined as net income attributable to
common shareholders plus: interest expense, provision for income
taxes, depreciation and amortization, stock-based compensation
expense, certain acquisition related costs and certain one-time and
generally non-recurring items (which are included in the
reconciliation above).
CONTACT: Mistras Group, Inc.
Frank Joyce, Chief Financial Officer
609-716-4103
www.mistrasgroup.com
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