Mistras Group, Inc. (NYSE:MG), a leading "one source" global
provider of technology enabled asset protection solutions, today
reported financial results for its fiscal second quarter ending
November 30, 2010. Revenue for the second quarter of fiscal 2011
was $88.8 million, an increase of $16.9 million or 24%, compared to
the $71.9 million in revenues reported for the second quarter of
fiscal 2010. Adjusted EBITDA*, a non-GAAP measure detailed later in
this release, grew by 30% to $15.9 million in the second quarter of
fiscal 2011 versus $12.3 million in the second quarter of fiscal
2010. Net income for the second quarter of fiscal 2011 grew by 59%
to $5.7 million, or $0.21 per diluted share, versus $3.6 million,
or $0.14 per diluted share, in the second quarter of fiscal 2010.
Financial Highlights
- Continued a trend of double digit revenue growth resulting in a
Compounded Annual Growth Rate (CAGR) in revenues of 27% over the
last five fiscal years.
- Revenues grew by 23% in the first six months of fiscal 2011 to
$157.2 million, up from $128.0 million in the first six months of
fiscal 2010.
- Adjusted EBITDA* grew by 27% in the first six months of fiscal
2011 to $24.4 million, versus $19.3 million in the first six months
of fiscal 2010.
- Adjusted EBITDA* as a percentage of revenue increased 80 basis
points to approximately 18% in the second quarter of fiscal
2011.
- Net income grew by 66% in the first six months of fiscal 2011
to $7.3 million, up from $4.4 million in 2010.
- The Company generated $11.1 million in net cash from operating
activities in the first six months of fiscal 2011, versus $8.6
million in the first six months of fiscal 2010, representing an
increase of 29%.
Revenue growth of 24% in the fiscal second quarter was driven by
organic growth of 18%, acquisition growth of 6%, and was only
minimally impacted by movements in foreign currency. During the
second quarter of fiscal 2011, the Company achieved revenue growth
across all of its segments, including gains of 25% in the Services
segment, 10% in the Products and Systems segment and 25% in the
International segment.
Net income during the second quarter of 2011 included an
increase in our legal provision of $0.1 million. In addition, net
income for the second quarter of 2011 included $1.0 million in
stock compensation expense, compared to $0.8 million in the second
quarter of 2010. Both of these expense classifications are included
in the calculation of Adjusted EBITDA*. The company believes
Adjusted EBITDA* is a key measure of operating performance for its
business segments.
Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos
stated that, "Our second quarter results continue the trend of
double digit growth in Revenues and Adjusted EBITDA* that we have
consistently delivered for several years now. Our second quarter
growth was especially impressive given the strong performance in
the second quarter of fiscal 2010, when both revenues and Adjusted
EBITDA* also grew significantly. Once again, organic growth led the
way, contributing to the bulk of our revenue growth. In addition,
we are pleased to have increased our Adjusted EBITDA* as a
percentage of revenues, which reflects our continued focus on
profitable growth and leveraging our strengthening market share
position."
Business Outlook for Fiscal 2011:
The Company is forecasting continued double digit growth in
Revenues and Adjusted EBITDA* for fiscal 2011. In addition, the
Company is raising its previously issued guidance range for fiscal
2011 revenue and Adjusted EBITDA* and now projects revenues to be
in the range of $310 million to $340 million (up from $300 million
to $330 million) and Adjusted EBITDA* to be in the range of $45
million to $50 million (up from $44 million to $49 million).
Mistras does not provide specific guidance for individual quarters,
but will reaffirm or update our annual guidance at least
quarterly.
Conference Call to Discuss Second Quarter Fiscal 2011
Results
Mistras will have a conference call on Wednesday, January 12th,
2011 at 9:00 am Eastern Time to discuss its results for the second
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) 314-4483 and use confirmation code
38815568 when prompted. The International number is (617) 213-8049.
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. A list, description and discussion of these 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.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 data) |
|
|
|
|
November 30,
2010 |
May 31, 2010 |
ASSETS |
|
|
Current Assets |
|
|
Cash and cash
equivalents |
$ 6,769 |
$ 16,037 |
Accounts receivable, net |
63,354 |
54,721 |
Inventories, net |
10,181 |
8,736 |
Deferred income taxes |
2,287 |
2,189 |
Prepaid expenses and other current
assets |
5,791 |
5,292 |
Total current assets |
88,382 |
86,975 |
Property, plant and equipment, net |
46,396 |
39,981 |
Intangible assets, net |
20,290 |
16,088 |
Goodwill |
51,586 |
44,315 |
Other assets |
454 |
1,273 |
Total assets |
$ 207,108 |
$ 188,632 |
|
|
|
LIABILITIES, PREFERRED STOCK AND
EQUITY |
|
|
Current liabilities |
|
|
Current portion of long-term debt |
$ 5,563 |
$ 6,303 |
Current portion of capital lease
obligations |
5,854 |
5,370 |
Accounts payable |
4,594 |
4,640 |
Accrued expenses and other current
liabilities |
22,585 |
20,090 |
Income taxes payable |
3,504 |
3,281 |
Total current liabilities |
42,100 |
39,684 |
Long-term debt, net of current portion |
12,269 |
5,691 |
Obligations under capital leases, net of
current portion |
9,477 |
9,199 |
Deferred income taxes |
2,325 |
2,087 |
Other long-term liabilities |
636 |
1,417 |
Total liabilities |
66,807 |
58,078 |
|
|
|
Commitments and contingencies |
|
|
Preferred stock, 10,000,000 shares
authorized |
-- |
-- |
Equity |
|
|
Common stock, $0.01 par value,
200,000,000 shares authorized, 26,664,855 and 26,663,528 shares
issued and outstanding as of November 30, 2010 and May 31, 2010,
respectively |
267 |
267 |
Additional paid-in capital |
163,830 |
162,054 |
Accumulated deficit |
(23,178) |
(30,448) |
Accumulated other comprehensive loss |
(1,021) |
(1,587) |
Total Mistras Group, Inc. stockholders'
equity |
139,898 |
130,286 |
Noncontrolling interest |
403 |
268 |
Total equity |
140,301 |
130,554 |
Total liabilities, preferred stock and
equity |
$ 207,108 |
$ 188,632 |
Mistras Group,
Inc. |
Unaudited Consolidated
Statement of Operations |
(in thousands, except
per share data) |
|
|
|
|
|
|
Three months
ended November 30, |
Six months ended
November 30, |
|
2010 |
2009 |
2010 |
2009 |
Revenues: |
|
|
|
|
Services |
$ 82,953 |
$ 66,862 |
$ 144,205 |
$ 118,518 |
Products |
5,884 |
5,037 |
13,042 |
9,470 |
Total revenues |
88,837 |
71,899 |
157,247 |
127,988 |
Cost of Revenues: |
|
|
|
|
Cost of services |
55,667 |
44,506 |
97,058 |
78,875 |
Cost of goods sold |
2,067 |
1,742 |
5,344 |
3,841 |
Depreciation of services |
3,136 |
2,435 |
5,945 |
4,715 |
Depreciation of products |
159 |
200 |
314 |
391 |
Total cost of
revenues |
61,029 |
48,883 |
108,661 |
87,822 |
Gross profit |
27,808 |
23,016 |
48,586 |
40,166 |
Selling, general and administrative
expenses |
15,615 |
13,686 |
31,094 |
26,819 |
Research and engineering |
569 |
449 |
1,124 |
932 |
Depreciation and amortization |
1,326 |
1,214 |
2,504 |
2,259 |
Legal reserve |
101 |
-- |
351 |
(297) |
Income from operations |
10,197 |
7,667 |
13,513 |
10,453 |
Other expenses |
|
|
|
|
Interest expense |
671 |
1,017 |
1,361 |
2,081 |
Loss on extinguishment of long-term debt |
-- |
218 |
-- |
387 |
Income before provision for income taxes
and noncontrolling interest |
9,526 |
6,432 |
12,152 |
7,985 |
Provision for income taxes |
3,818 |
2,875 |
4,872 |
3,569 |
Net income |
5,708 |
3,557 |
7,280 |
4,416 |
Net (income) loss attributable to
noncontrolling interests, net of taxes |
(30) |
5 |
(10) |
(39) |
Net income attributable to Mistras Group,
Inc. |
5,678 |
3,562 |
7,270 |
4,377 |
Accretion of preferred stock |
-- |
6,499 |
-- |
6,499 |
Net income attributable to common
shareholders |
$ 5,678 |
$ 10,061 |
$ 7,270 |
$ 10,876 |
Earnings per common share: |
|
|
|
|
Basic |
$ 0.21 |
$ 0.48 |
$ 0.27 |
$ 0.64 |
Diluted |
$ 0.21 |
$ 0.14 |
$ 0.27 |
$ 0.19 |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
26,665 |
20,987 |
26,664 |
16,971 |
Diluted |
26,816 |
24,993 |
26,795 |
22,980 |
Mistras Group,
Inc. |
Unaudited Operating
Data by Segment |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended November 30, |
Six months ended
November 30, |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Revenues |
|
|
|
|
Services |
$ 76,108 |
$ 60,938 |
$ 131,390 |
$ 106,640 |
Products and Systems |
5,228 |
4,744 |
10,538 |
8,369 |
International |
9,350 |
7,479 |
18,390 |
15,230 |
Corporate and
eliminations |
(1,849) |
(1,262) |
(3,071) |
(2,251) |
|
$ 88,837 |
$ 71,899 |
$ 157,247 |
$ 127,988 |
|
|
|
|
|
|
Three months
ended November 30, |
Six months ended
November 30, |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Gross
profit |
|
|
|
|
Services |
$ 21,753 |
$ 17,405 |
$ 36,754 |
$ 29,933 |
Products and Systems |
2,821 |
2,818 |
5,390 |
4,506 |
International |
3,260 |
2,944 |
6,531 |
5,990 |
Corporate and
eliminations |
(26) |
(151) |
(89) |
(263) |
|
$ 27,808 |
$ 23,016 |
$ 48,586 |
$ 40,166 |
Mistras Group,
Inc. |
Unaudited
Reconciliation of Net Income Attributable to Mistras Group, Inc. to
EBITDA and Adjusted EBITDA |
(in
thousands) |
|
|
|
|
|
|
Three
months ended November 30, |
Six months
ended November 30, |
|
2010 |
2009 |
2010 |
2009 |
EBITDA and Adjusted EBITDA
data |
|
|
|
|
Net income attributable to Mistras Group,
Inc. |
$ 5,678 |
$ 3,562 |
$ 7,270 |
$ 4,377 |
Interest expense |
671 |
1,017 |
1,361 |
2,081 |
Provision for income taxes |
3,818 |
2,875 |
4,872 |
3,569 |
Depreciation and amortization |
4,621 |
3,849 |
8,763 |
7,365 |
EBITDA |
$ 14,788 |
$ 11,303 |
$ 22,266 |
$ 17,392 |
Legal reserve |
101 |
-- |
351 |
(297) |
Large customer bankruptcy |
-- |
-- |
-- |
767 |
Stock compensation expense |
1,047 |
783 |
1,776 |
1,033 |
Loss on extinguishment of debt |
-- |
218 |
-- |
387 |
Adjusted EBITDA |
$ 15,936 |
$ 12,304 |
$ 24,393 |
$ 19,282 |
"Adjusted EBITDA" is defined as net income attributable to
Mistras Group, Inc. 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: Frank Joyce, Chief Financial Officer
609-716-4103
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