Mistras Group, Inc. (NYSE:MG), a leading "one source" global
provider of technology-enabled asset protection solutions, today
reported financial results for its fiscal third quarter ending
February 28, 2011. Revenue for the third quarter of fiscal 2011 was
$79.2 million, an increase of $14.9 million, or 23%, compared to
$64.4 million reported in the third quarter of fiscal 2010.
Adjusted EBITDA*, a non-GAAP measure detailed later in this
release, increased 61% to $10.5 million in the third quarter of
fiscal 2011 versus $6.5 million in the third quarter of fiscal
2010. Net income for the third quarter of fiscal 2011 tripled to
$2.4 million, or $0.09 per diluted share, versus $0.8 million, or
$0.03 per diluted share, in the third quarter of fiscal 2010.
Revenue growth of 23% in the fiscal third quarter was driven by
organic growth of 17% and acquisition growth of 6% with minimal
impact from movements in foreign currency. During the third quarter
of fiscal 2011, the Company achieved revenue growth across all of
its segments, including gains of 26% in the Services segment, 14%
in the Products and Systems segment and 7% in the International
segment.
Additional Financial Highlights for the 3 month and 9
month periods:
- Revenue grew 23% in the first nine months of fiscal 2011 to
$236.5 million, up from $192.3 million in the first nine months of
fiscal 2010.
- Adjusted EBITDA*, a non-GAAP measure detailed later in this
release, grew 35% to $34.9 million in the first nine months of
fiscal 2011 versus $25.8 million in the first nine months of fiscal
2010.
- Adjusted EBITDA* as a percentage of revenue increased 130 basis
points in the first 9 months of fiscal 2011 to approximately
15%.
- Net income grew 89% for the first nine months of fiscal 2011 to
$9.7 million, or $0.36 per diluted share, up from $5.2 million or
$0.21 per diluted share in the first nine months of fiscal
2010.
- The Company generated $21.4 million in net cash from operating
activities in the first nine months of fiscal 2011, versus $12.4
million in the first nine months of fiscal 2010, representing an
increase of 73%.
- Gross profit as a percentage of revenue, or gross profit
margin, was up in both the third quarter (110 basis points) and
first nine months (10 basis points) of fiscal 2011 versus prior
year.
Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos
stated that, "We are very pleased with the financial results for
the third quarter, which is historically one of our softer
quarters. Consistent, sustained revenue and EBITDA growth has
helped us drive our operating leverage, generate more cash from
operations and improve our G&A expenses as a percentage of
revenues. Once again, our 'one source' asset protection
solution model has demonstrated its ability to significantly
improve results over the prior year as it will be moving
forward."
Business Outlook for Fiscal 2011
The Company is forecasting continued double digit growth in
Revenues and Adjusted EBITDA* for the remainder of Fiscal 2011. The
Company is affirming its previously issued guidance and projects
its fiscal 2011 revenues to be above the midpoint of the
range of $310 million to $340 million and Adjusted EBITDA* to
be above the midpoint of the range of $45 million to $50
million. Mistras does not provide specific guidance for
individual quarters, but will reaffirm or update its annual
guidance at least quarterly.
Conference Call to Discuss Third Quarter
Results
Mistras will have a conference call on Wednesday, April 13th,
2011 at 9:00 am Eastern Time to discuss its results for the third
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 (800) 510-9834 and use confirmation code
64642932 when prompted. The International number is (617) 614-3669.
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 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. 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 measures
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) |
|
|
|
|
February 28,
2011 |
May 31, 2010 |
ASSETS |
|
|
Current Assets |
|
|
Cash and cash
equivalents |
$ 6,560 |
$ 16,037 |
Accounts receivable,
net |
62,290 |
54,721 |
Inventories,
net |
10,285 |
8,736 |
Deferred income
taxes |
2,271 |
2,189 |
Prepaid expenses and
other current assets |
5,622 |
5,292 |
Total current assets |
87,028 |
86,975 |
Property, plant and equipment, net |
46,322 |
39,981 |
Intangible assets, net |
19,317 |
16,088 |
Goodwill |
53,442 |
44,315 |
Other assets |
896 |
1,273 |
Total assets |
$ 207,005 |
$ 188,632 |
|
|
|
LIABILITIES, PREFERRED STOCK AND
EQUITY |
|
|
Current liabilities |
|
|
Current portion of long-term
debt |
$ 4,769 |
$ 6,303 |
Current portion of capital
lease obligations |
5,997 |
5,370 |
Accounts payable |
4,733 |
4,640 |
Accrued expenses and other
current liabilities |
22,288 |
20,090 |
Income taxes payable |
2,212 |
3,281 |
Total current liabilities |
39,999 |
39,684 |
Long-term debt, net of current portion |
9,793 |
5,691 |
Obligations under capital leases, net of
current portion |
8,676 |
9,199 |
Deferred income taxes |
3,526 |
2,087 |
Other long-term liabilities |
1,058 |
1,417 |
Total liabilities |
63,052 |
58,078 |
|
|
|
Commitments and contingencies |
|
|
Preferred stock, 10,000,000 shares
authorized |
-- |
-- |
Equity |
|
|
Common stock, $0.01 par value,
200,000,000 shares authorized, 26,670,181 and 26,663,528 shares
issued and outstanding as of February 28, 2011 and May 31, 2010,
respectively |
267 |
267 |
Additional paid-in capital |
164,764 |
162,054 |
Accumulated deficit |
(20,735) |
(30,448) |
Accumulated other comprehensive
loss |
(707) |
(1,587) |
Total Mistras Group, Inc.
stockholders' equity |
143,589 |
130,286 |
Noncontrolling interest |
364 |
268 |
Total equity |
143,953 |
130,554 |
Total liabilities, preferred
stock and equity |
$ 207,005 |
$ 188,632 |
|
Mistras Group,
Inc. |
Unaudited Consolidated
Statement of Operations |
(in thousands, except
per share data) |
|
|
|
|
|
|
Three months
ended February 28, |
Nine months ended
February 28, |
|
2011 |
2010 |
2011 |
2010 |
Revenues: |
|
|
|
|
Services |
$ 72,411 |
$ 57,966 |
$ 216,616 |
$ 176,484 |
Products |
6,802 |
6,390 |
19,844 |
15,860 |
Total revenues |
79,213 |
64,356 |
236,460 |
192,344 |
Cost of Revenues: |
|
|
|
|
Cost of services |
50,696 |
41,641 |
147,754 |
120,516 |
Cost of goods sold |
2,460 |
2,343 |
7,804 |
6,184 |
Depreciation of services |
3,307 |
2,547 |
9,252 |
7,262 |
Depreciation of products |
153 |
198 |
467 |
589 |
Total cost of
revenues |
56,616 |
46,729 |
165,277 |
134,551 |
Gross profit |
22,597 |
17,627 |
71,183 |
57,793 |
Selling, general and administrative
expenses |
16,005 |
14,110 |
47,099 |
40,929 |
Research and engineering |
514 |
586 |
1,638 |
1,518 |
Depreciation and amortization |
1,385 |
1,299 |
3,889 |
3,558 |
Legal reserve |
-- |
-- |
351 |
(297) |
Income from operations |
4,693 |
1,632 |
18,206 |
12,085 |
Other expenses |
|
|
|
|
Interest expense |
596 |
744 |
1,957 |
2,825 |
Loss on extinguishment of long-term debt |
-- |
-- |
-- |
387 |
Income before provision for
income taxes and noncontrolling interest |
4,097 |
888 |
16,249 |
8,873 |
Provision for income taxes |
1,690 |
123 |
6,562 |
3,692 |
Net income |
2,407 |
765 |
9,687 |
5,181 |
Net loss (income) attributable to
noncontrolling interests, net of taxes |
36 |
9 |
26 |
(30) |
Net income attributable to
Mistras Group, Inc. |
2,443 |
774 |
9,713 |
5,151 |
Accretion of preferred stock |
-- |
-- |
-- |
6,499 |
Net income attributable to
common shareholders |
$ 2,443 |
$ 774 |
$ 9,713 |
$ 11,650 |
Earnings per common share: |
|
|
|
|
Basic |
$ 0.09 |
$ 0.03 |
$ 0.36 |
$ 0.58 |
Diluted |
$ 0.09 |
$ 0.03 |
$ 0.36 |
$ 0.21 |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
26,667 |
26,469 |
26,665 |
20,103 |
Diluted |
26,919 |
27,764 |
26,824 |
24,511 |
|
Mistras Group,
Inc. |
Unaudited Operating
Data by Segment |
(in
thousands) |
|
|
|
|
|
|
Three months
ended February 28, |
Nine months ended
February 28, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
Revenues |
|
|
|
|
Services |
$ 66,708 |
$ 52,912 |
$ 198,098 |
$ 159,552 |
Products and
Systems |
5,436 |
4,768 |
15,974 |
13,137 |
International |
8,671 |
8,092 |
27,062 |
23,322 |
Corporate and
eliminations |
(1,602) |
(1,416) |
(4,674) |
(3,667) |
|
$ 79,213 |
$ 64,356 |
$ 236,460 |
$ 192,344 |
|
|
|
|
|
|
Three months
ended February 28, |
Nine months ended
February 28, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
Gross
profit |
|
|
|
|
Services |
$ 16,650 |
$ 11,898 |
$ 53,404 |
$ 41,831 |
Products and
Systems |
3,049 |
2,711 |
8,440 |
7,217 |
International |
2,935 |
3,222 |
9,466 |
9,212 |
Corporate and
eliminations |
(37) |
(204) |
(127) |
(467) |
|
$ 22,597 |
$ 17,627 |
$ 71,183 |
$ 57,793 |
|
Mistras Group,
Inc. |
Unaudited
Reconciliation of Net Income Attributable to Mistras Group, Inc. to
EBITDA and Adjusted EBITDA |
(in
thousands) |
|
|
|
|
|
|
Three months
ended February 28, |
Nine months ended
February 28, |
|
2011 |
2010 |
2011 |
2010 |
EBITDA and Adjusted EBITDA
data |
|
|
Net income attributable to Mistras Group,
Inc. |
$ 2,443 |
$ 774 |
$ 9,713 |
$ 5,151 |
Interest expense |
596 |
744 |
1,957 |
2,825 |
Provision for income taxes |
1,690 |
123 |
6,562 |
3,692 |
Depreciation and amortization |
4,845 |
4,044 |
13,608 |
11,409 |
EBITDA |
$ 9,574 |
$ 5,685 |
$ 31,840 |
$ 23,077 |
Legal reserve |
-- |
-- |
351 |
(297) |
Large customer bankruptcy |
-- |
-- |
-- |
767 |
Stock compensation expense |
903 |
827 |
2,680 |
1,860 |
Loss on extinguishment of debt |
-- |
-- |
-- |
387 |
Adjusted EBITDA |
$ 10,477 |
$ 6,512 |
$ 34,871 |
$ 25,794 |
"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: Nestor S. Makarigakis
Manager of Marketing and Communications
1(609) 716-4000
marcom@mistrasgroup.com
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