Mistras Group, Inc. Delivers Strong Revenue and Earnings Growth as FY 2011 Revenue Increases 24%, Adjusted EBITDA Up 33%
August 09 2011 - 4:01PM
Mistras Group, Inc. (NYSE:MG), a leading "one source" global
provider of technology-enabled asset protection solutions, today
reported record financial results for the fourth quarter and fiscal
year ended May 31, 2011. Revenue for the fourth quarter of fiscal
2011 was $102.1 million, an increase of 28%, over the $79.8 million
reported in the fourth quarter of fiscal 2010. Adjusted EBITDA*, a
non-GAAP measure detailed later in this release, increased 28% to
$17.5 million in the fourth quarter of fiscal 2011 versus $13.7
million in the fourth quarter of fiscal 2010. Net income for the
fourth quarter of fiscal 2011 grew by 27% to $6.7 million, or $0.25
per diluted share, versus $5.3 million, or $0.20 per diluted share,
in the fourth quarter of fiscal 2010. For the year, net income was
$16.4 million, or $0.61 per diluted share, versus $10.4 million, or
$0.43 per diluted share, in fiscal 2010. Fiscal 2011 net income
includes a fourth quarter pre-tax provision of $0.7 million for
slow-moving inventory. Earnings per share would have been $0.26 and
$0.63 per diluted share for the 2011 fourth quarter and fiscal
year, respectively, without this inventory charge.
Consistent with prior quarters, organic growth was a significant
driver behind the overall revenue increase, contributing growth
rates of 14% and 16% for the 2011 fourth quarter and fiscal year,
respectively. During the fourth quarter, the Company achieved
broad based revenue growth across all of its business segments and
surpassed $100 million in quarterly revenue for the first time.
Financial Highlights for the 4th Quarter and FY 2011
Fiscal Year:
- Revenue grew 24% in fiscal 2011 to $338.6 million, an increase
of $66.5 million, up from $272.1 million in fiscal 2010.
- Adjusted EBITDA*, a non-GAAP measure detailed later in this
release, grew 33% to $52.3 million in fiscal 2011 versus $39.5
million in fiscal 2010.
- Adjusted EBITDA* as a percentage of revenue increased 100 basis
points in fiscal 2011 to 15.5%, versus 14.5% for fiscal 2010.
- Net income grew 58% for fiscal 2011 to $16.4 million, or $0.61
per diluted share, up from $10.4 million or $0.43 per diluted share
in fiscal 2010.
- The Company generated $25.3 million in net cash from operating
activities in fiscal 2011, versus $19.0 million in fiscal 2010,
representing an increase of 33%.
- Gross profit margin was 31.5% in the fourth quarter and 30.5%
for all of Fiscal 2011. Excluding the inventory provision
mentioned above, Gross Profit margin was 32.2% in the fourth
quarter and 30.7% for the 2011 fiscal year, representing increases
over both corresponding prior year periods.
Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos
stated that, "Once again, we are very pleased by the consistent
financial results produced by the Mistras model. In both the
fourth quarter and fiscal year, the Company generated record
revenues, gross profit, operating income, net income, earnings per
share and adjusted EBITDA. Our unique approach which provides 'One
Source Asset Protection Solutions' to our customers, has once again
produced significant amounts of organic and acquisition revenue
growth. The growth fundamentals of our business are
strong and we believe this growth is a testament as to how our
technology based solutions are being received and implemented by
our customers."
Business Outlook/Guidance for Fiscal Year
2012
The Company's outlook is for continued double digit growth in
revenue and Adjusted EDITDA*. The Company projects its fiscal
2012 revenues to be in the range of $375 million to $390 million
and Adjusted EBITDA* to be in the range of $59 million to $64
million. Mistras does not provide specific guidance for
individual quarters, but will reaffirm or update its annual
guidance at least quarterly. Dr.Vahaviolos concluded, "The
Company is very pleased with the prospects for its business for
fiscal 2012 and beyond. We believe that the Mistras model will
continue to deliver the double digit growth in revenue and adjusted
EBITDA that we have achieved for several years."
Earnings Conference Call
In connection with this earnings release, Mistras will hold its
quarterly conference call on Wednesday, August 10 at 9:00 a.m.
(Eastern). 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 866-730-5770 and use confirmation
code 90453125 when prompted. The International dial-in number
is 857-350-1594.
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 and
its Annual Report on Form 10-K for fiscal year 2011, as updated by
our reports on Form 10-Q and Form 8-K. 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) |
|
|
|
|
May 31, 2011 |
May 31, 2010 |
ASSETS |
|
|
Current Assets |
|
|
Cash and cash
equivalents |
$ 10,879 |
$ 16,037 |
Accounts receivable,
net |
78,031 |
54,721 |
Inventories, net |
9,830 |
8,736 |
Deferred income
taxes |
1,278 |
2,189 |
Prepaid expenses and other
current assets |
6,761 |
6,599 |
Total current assets |
106,779 |
88,282 |
Property, plant and equipment, net |
49,168 |
39,981 |
Intangible assets, net |
27,304 |
16,088 |
Goodwill |
64,146 |
44,315 |
Other assets |
1,240 |
1,273 |
Total assets |
$ 248,637 |
$ 189,939 |
|
|
|
LIABILITIES, PREFERRED STOCK AND
EQUITY |
|
|
Current liabilities |
|
|
Current portion of long-term
debt |
$ 7,226 |
$ 7,610 |
Current portion of capital
lease obligations |
5,853 |
5,370 |
Accounts payable |
6,656 |
4,640 |
Accrued expenses and other
current liabilities |
28,028 |
20,090 |
Income taxes payable |
2,825 |
3,281 |
Total current liabilities |
50,588 |
40,991 |
Long-term debt, net of current portion |
14,625 |
5,691 |
Obligations under capital leases, net of
current portion |
9,623 |
9,199 |
Deferred income taxes |
2,863 |
2,087 |
Other long-term liabilities |
3,452 |
1,417 |
Total liabilities |
81,151 |
59,385 |
|
|
|
Commitments and contingencies |
|
|
Preferred stock, 10,000,000 shares
authorized |
-- |
-- |
Equity |
|
|
Common stock, $0.01 par value,
200,000,000 shares authorized, 27,667,122 and 26,663,528 shares
issued and outstanding as of May 31, 2011 and May 31, 2010,
respectively |
277 |
267 |
Additional paid-in capital |
180,594 |
162,054 |
Accumulated deficit |
(14,017) |
(30,448) |
Accumulated other comprehensive
loss |
303 |
(1,587) |
Total Mistras Group, Inc.
stockholders' equity |
167,157 |
130,286 |
Noncontrolling interest |
329 |
268 |
Total equity |
167,486 |
130,554 |
Total liabilities, preferred
stock and equity |
$ 248,637 |
$ 189,939 |
|
Mistras Group,
Inc. |
Unaudited Consolidated
Statement of Operations |
(in thousands, except
per share data) |
|
|
|
|
|
|
Three months
ended May 31, |
Year ended May
31, |
|
2011 |
2010 |
2011 |
2010 |
Revenues: |
|
|
|
|
Services |
$ 92,086 |
$ 72,188 |
$ 308,702 |
$ 248,672 |
Products |
10,043 |
7,596 |
29,887 |
23,456 |
Total revenues |
102,129 |
79,784 |
338,589 |
272,128 |
Cost of Revenues: |
|
|
|
|
Cost of services |
61,758 |
49,075 |
209,512 |
169,591 |
Cost of goods sold |
4,664 |
2,705 |
12,468 |
8,889 |
Depreciation of services |
3,324 |
2,578 |
12,576 |
9,840 |
Depreciation of products |
163 |
81 |
630 |
670 |
Total cost of
revenues |
69,909 |
54,439 |
235,186 |
188,990 |
Gross profit |
32,220 |
25,345 |
103,403 |
83,138 |
Selling, general and administrative
expenses |
18,884 |
14,534 |
65,983 |
55,463 |
Research and engineering |
512 |
884 |
2,150 |
2,402 |
Depreciation and amortization |
1,497 |
1,115 |
5,386 |
4,673 |
Legal reserve |
(78) |
-- |
273 |
(297) |
Income from operations |
11,405 |
8,812 |
29,611 |
20,897 |
Other expenses |
|
|
|
|
Interest expense |
816 |
706 |
2,773 |
3,531 |
Loss on extinguishment of long-term debt |
-- |
-- |
-- |
387 |
Income before provision for
income taxes |
10,589 |
8,106 |
26,838 |
16,979 |
Provision for income taxes |
3,940 |
2,835 |
10,502 |
6,527 |
Net
income |
6,649 |
5,271 |
16,336 |
10,452 |
Net loss (income) attributable to
noncontrolling interests, net of taxes |
69 |
7 |
95 |
(23) |
Net income attributable to
Mistras Group, Inc. |
6,718 |
5,278 |
16,431 |
10,429 |
Accretion of preferred stock |
-- |
-- |
-- |
6,499 |
Net income attributable to
common shareholders |
$ 6,718 |
$ 5,278 |
$ 16,431 |
$ 16,928 |
Earnings per common share: |
|
|
|
|
Basic |
$ 0.25 |
$ 0.20 |
$ 0.61 |
$ 0.78 |
Diluted |
$ 0.25 |
$ 0.20 |
$ 0.61 |
$ 0.43 |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
26,899 |
26,613 |
26,724 |
21,744 |
Diluted |
27,384 |
26,795 |
26,933 |
24,430 |
|
Mistras Group,
Inc. |
Unaudited Operating
Data by Segment |
(in
thousands) |
|
|
|
|
|
|
Three months
ended May 31, |
Year ended May
31, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
Revenues |
|
|
|
|
Services |
$ 85,041 |
$ 68,230 |
$ 283,139 |
$ 227,782 |
Products and
Systems |
10,131 |
5,738 |
26,105 |
18,875 |
International |
9,736 |
7,598 |
36,798 |
30,920 |
Corporate and
eliminations |
(2,779) |
(1,782) |
(7,453) |
(5,449) |
|
$ 102,129 |
$ 79,784 |
$ 338,589 |
$ 272,128 |
|
|
|
|
|
|
Three months
ended May 31, |
Year ended May
31, |
|
2011 |
2010 |
2011 |
2010 |
|
|
|
Gross
profit |
|
|
|
|
Services |
$ 24,479 |
$ 20,132 |
$ 77,883 |
$ 61,963 |
Products and
Systems |
4,799 |
2,698 |
13,239 |
9,915 |
International |
3,456 |
2,456 |
12,922 |
11,668 |
Corporate and
eliminations |
(514) |
59 |
(641) |
(408) |
|
$ 32,220 |
$ 25,345 |
$ 103,403 |
$ 83,138 |
|
Mistras Group,
Inc. |
Unaudited
Reconciliation of Net Income Attributable to Mistras Group, Inc. to
EBITDA and Adjusted EBITDA |
(in
thousands) |
|
|
|
|
|
|
Three months
ended May 31, |
Year ended May
31, |
|
2011 |
2010 |
2011 |
2010 |
EBITDA and Adjusted EBITDA
data |
|
|
Net income attributable to Mistras Group,
Inc. |
$ 6,718 |
$ 5,278 |
$ 16,431 |
$ 10,429 |
Interest expense |
816 |
706 |
2,773 |
3,531 |
Provision for income taxes |
3,940 |
2,835 |
10,502 |
6,527 |
Depreciation and amortization |
4,984 |
3,774 |
18,592 |
15,183 |
EBITDA |
$ 16,458 |
$ 12,593 |
$ 48,298 |
$ 35,670 |
Legal reserve |
(78) |
-- |
273 |
(297) |
Large customer bankruptcy |
-- |
(372) |
-- |
395 |
Stock compensation expense |
1,071 |
835 |
3,751 |
2,695 |
Acquisition related costs |
-- |
614 |
-- |
614 |
Loss on extinguishment of debt |
-- |
-- |
-- |
387 |
Adjusted EBITDA |
$ 17,451 |
$ 13,670 |
$ 52,322 |
$ 39,464 |
CONTACT: Nestor S. Makarigakis
Manager of Marketing and Communications
1(609) 716-4000
marcom@mistrasgroup.com
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