Mistras Group Delivers Solid Third Quarter Results
April 08 2013 - 4:01PM
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, 2013. Revenue for the third quarter was $133.7 million
and net income was $2.8 million, or $0.09 per diluted share.
Revenue for the nine months ended February 28, 2013 was $384.8
million and net income was $16.2 million, or $0.56 per diluted
share.
Summary financial highlights for the Fiscal 2013 third
quarter and nine month period:
- Revenue growth of 28% in the quarter was led by acquisition
growth of 23% and organic growth of 6%. Revenue in the first nine
months grew by 24% led by acquisition growth of 20% and organic
growth of 5%.
- The Services segment delivered 10% organic growth in the
quarter, while International segment revenues more than
doubled.
- Adjusted Diluted Earnings Per Share* was $0.07 and $0.54 in the
third quarter and nine month period, respectively. Adjusted Diluted
Earnings Per Share excludes a $0.02 benefit in both the quarter and
the nine month period resulting from the reversal of certain
acquisition-related contingent liabilities.
- Adjusted EBITDA* was $12.5 million in the third quarter and
$51.8 million in the nine month period.
- During the first nine months of fiscal 2013, Net Cash Provided
by Operating Activities was $27.5 million, an increase of 31%.
- Third quarter results include approximately $1.1 million in
higher employee medical claims, an increase of 41% over the prior
year.
Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos
stated: "The Company's revenue growth momentum continued in the
third quarter and the organic growth rate of our Services segment
was a big factor in that momentum. In a traditionally soft third
quarter, our International segment continued to improve, however,
our results were impacted by project mix in our Services segment
and lower product sales in our Products and Systems segment."
Dr. Vahaviolos continued, "I am very pleased with the tempo of
our business in the third quarter and also with the broad-based
opportunities we see developing for our business over the next year
and beyond."
Outlook and Guidance for Fiscal 2013
The Company's outlook is for continued double digit growth in
revenue and Adjusted EBITDA*. The Company is confident in its
long-term prospects, but in light of the current business and
economic environment, the Company now estimates its fiscal 2013
Adjusted EBITDA* to be in the range of $75 million to $80 million,
and revenues to be in the high end of its previous guidance of $525
million to $535 million.
Earnings Conference Call
In connection with this earnings release, Mistras will hold its
quarterly conference call on Tuesday, April 9th 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 1-800-299-9630 and use confirmation code 54831776 when
prompted. The International dial-in number is 1-617-786-2904.
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.
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, and other
matters. 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 for fiscal year 2012
filed with the Securities and Exchange Commission on August 14,
2012, 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 terms "Adjusted EBITDA" and "Adjusted Diluted Earnings Per
Share" used in this release are financial measurements not
calculated in accordance with generally accepted accounting
principles in the U.S. ("GAAP"). Reconciliations of Adjusted EBITDA
and Adjusted Diluted Earnings Per Share to financial measurements
under GAAP are set forth in a table attached to this press
release. In addition, the Company has also included in the
tables for non-GAAP measurements the non-GAAP measurement "Adjusted
Net Income" reconciling this measurement to a financial measurement
under GAAP. The Company believes that investors and other
users of the financial statements benefit from the presentation of
Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings
Per Share because they provide additional metrics to compare the
Company's operating performance on a consistent basis and measure
underlying trends and results of the Company's business.
Mistras Group, Inc. and
Subsidiaries |
Unaudited Consolidated
Balance Sheets |
(in thousands, except
share and per share data) |
|
|
|
|
February 28,
2013 |
May 31, 2012 |
ASSETS |
|
|
Current Assets |
|
|
Cash and cash
equivalents |
$ 8,903 |
$ 8,410 |
Accounts receivable,
net |
108,686 |
104,515 |
Inventories,
net |
12,126 |
12,492 |
Deferred income
taxes |
1,891 |
1,885 |
Prepaid expenses and
other current assets |
12,763 |
6,321 |
Total current assets |
144,369 |
133,623 |
Property, plant and equipment, net |
69,846 |
63,527 |
Intangible assets, net |
56,428 |
34,469 |
Goodwill |
125,532 |
96,819 |
Other assets |
739 |
1,378 |
Total assets |
$ 396,914 |
$ 329,816 |
|
|
|
LIABILITIES, PREFERRED STOCK AND
EQUITY |
|
|
Current Liabilities |
|
|
Current portion of long-term
debt |
$ 7,730 |
$ 5,971 |
Current portion of capital
lease obligations |
6,714 |
5,951 |
Accounts payable |
8,298 |
11,944 |
Accrued expenses and other
current liabilities |
43,411 |
39,334 |
Income taxes payable |
1,997 |
1,119 |
Total current liabilities |
68,150 |
64,319 |
Long-term debt, net of current portion |
65,210 |
34,258 |
Obligations under capital leases, net of
current portion |
11,859 |
13,094 |
Deferred income taxes |
14,582 |
4,901 |
Other long-term liabilities |
21,447 |
19,996 |
Total liabilities |
181,248 |
136,568 |
|
|
|
Commitments and contingencies |
|
|
Preferred stock, 10,000,000 shares
authorized |
-- |
-- |
Equity |
|
|
Common stock, $0.01 par value,
200,000,000 shares authorized, 28,194,980 and 28,025,507
shares issued and outstanding as of February 28, 2013 and May 31,
2012, respectively |
282 |
280 |
Additional paid-in capital |
193,512 |
188,443 |
Retained earnings |
23,531 |
7,336 |
Accumulated other comprehensive
loss |
(1,928) |
(3,047) |
Total Mistras Group, Inc.
stockholders' equity |
215,397 |
193,012 |
Noncontrolling interest |
269 |
236 |
Total equity |
215,666 |
193,248 |
Total liabilities, preferred
stock and equity |
$ 396,914 |
$ 329,816 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Consolidated
Statements of Operations |
(in thousands, except
per share data) |
|
|
|
|
|
|
Three months ended |
Nine months ended |
|
February 28,
2013 |
February 29,
2012 |
February 28,
2013 |
February 29,
2012 |
Revenues: |
|
|
|
|
Services |
$ 124,510 |
$ 94,253 |
$ 351,466 |
$ 281,097 |
Products |
9,151 |
9,865 |
33,311 |
28,688 |
Total revenues |
133,661 |
104,118 |
384,777 |
309,785 |
Cost of revenues: |
|
|
|
|
Cost of services |
91,209 |
66,336 |
248,769 |
194,270 |
Cost of products sold |
3,527 |
4,238 |
13,022 |
12,094 |
Depreciation related to
services |
4,465 |
3,760 |
12,565 |
10,639 |
Depreciation related to
products |
254 |
200 |
593 |
563 |
Total cost of
revenues |
99,455 |
74,534 |
274,949 |
217,566 |
Gross profit |
34,206 |
29,584 |
109,828 |
92,219 |
Selling, general and administrative
expenses |
27,209 |
20,806 |
74,063 |
59,565 |
Research and engineering |
754 |
578 |
1,801 |
1,769 |
Depreciation and amortization |
2,473 |
1,805 |
6,535 |
4,787 |
Acquisition-related expense, net |
(1,212) |
973 |
(1,006) |
1,009 |
Income from operations |
4,982 |
5,422 |
28,435 |
25,089 |
Other expenses |
|
|
|
|
Interest expense |
882 |
690 |
2,458 |
2,121 |
Loss on extinguishment of long-term debt |
-- |
113 |
-- |
113 |
Income before provision for
income taxes |
4,100 |
4,619 |
25,977 |
22,855 |
Provision for income taxes |
1,349 |
1,548 |
9,749 |
8,672 |
Net
income |
2,751 |
3,071 |
16,228 |
14,183 |
Net (income) loss attributable to
noncontrolling interests, net of taxes |
-- |
(34) |
(33) |
38 |
Net income attributable to
Mistras Group, Inc. |
$ 2,751 |
$ 3,037 |
$ 16,195 |
$ 14,221 |
Earnings per common share: |
|
|
|
|
Basic |
$ 0.10 |
$ 0.11 |
$ 0.58 |
$ 0.51 |
Diluted |
$ 0.09 |
$ 0.11 |
$ 0.56 |
$ 0.50 |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
28,175 |
27,921 |
28,121 |
27,794 |
Diluted |
29,101 |
28,829 |
29,078 |
28,563 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Operating
Data by Segment |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three
months ended |
Nine months
ended |
|
February 28,
2013 |
February 29,
2012 |
February 28,
2013 |
February 29,
2012 |
|
|
|
|
|
Revenues |
|
|
|
|
Services |
$ 90,537 |
$ 80,895 |
$ 278,147 |
$ 253,493 |
International |
37,516 |
17,164 |
88,722 |
38,794 |
Products and
Systems |
7,645 |
9,824 |
25,618 |
26,429 |
Corporate and
eliminations |
(2,037) |
(3,765) |
(7,710) |
(8,931) |
|
$ 133,661 |
$ 104,118 |
$ 384,777 |
$ 309,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended |
Nine months
ended |
|
February 28,
2013 |
February 29,
2012 |
February 28,
2013 |
February 29,
2012 |
|
|
|
|
|
Gross
profit |
|
|
|
|
Services |
$ 20,496 |
$ 20,640 |
$ 72,128 |
$ 68,001 |
International |
9,851 |
4,586 |
24,231 |
12,263 |
Products and
System |
3,790 |
4,938 |
13,010 |
12,952 |
Corporate and
eliminations |
69 |
(580) |
459 |
(997) |
|
$ 34,206 |
$ 29,584 |
$ 109,828 |
$ 92,219 |
|
Mistras Group,
Inc. and Subsidiaries |
Unaudited
Reconciliation of |
Net Income Attributable
to Mistras Group, Inc. to EBITDA and Adjusted EBITDA |
(in
thousands) |
|
|
|
|
|
|
Three
months ended |
Nine months
ended |
|
February 28,
2013 |
February 29,
2012 |
February 28,
2013 |
February 29,
2012 |
EBITDA and Adjusted EBITDA
data |
|
|
|
|
Net income attributable to Mistras Group,
Inc. |
$ 2,751 |
$ 3,037 |
$ 16,195 |
$ 14,221 |
Interest expense |
882 |
690 |
2,458 |
2,121 |
Provision for income taxes |
1,349 |
1,548 |
9,749 |
8,672 |
Depreciation and amortization |
7,192 |
5,765 |
19,693 |
15,989 |
EBITDA |
12,174 |
11,040 |
48,095 |
41,003 |
Stock compensation expense |
1,544 |
1,244 |
4,749 |
3,791 |
Acquisition-related expense, net |
(1,212) |
973 |
(1,006) |
1,009 |
Loss on extinguishment of debt |
-- |
113 |
-- |
113 |
Adjusted EBITDA |
$ 12,506 |
$ 13,370 |
$ 51,838 |
$ 45,916 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited
Reconciliation of |
Net Income Attributable
to Mistras Group, Inc. (GAAP) to Adjusted Net Income and Adjusted
Diluted Earnings Per Share (Non-GAAP) |
(in thousands, except
per share data) |
|
|
|
|
|
|
Three
months ended |
Nine months
ended |
|
February 28,
2013 |
February 29,
2012 |
February 28,
2013 |
February 29,
2012 |
Adjusted net income |
|
|
|
|
Net income attributable to Mistras Group,
Inc. (GAAP) |
$ 2,751 |
$ 3,037 |
$ 16,195 |
$ 14,221 |
Acquisition-related expense, net ($1.2
million benefit and $1.0 million expense, pre-tax, for the
three months ended February 28, 2013 and February 28, 2012,
respectively and $1.0 million benefit and $1.0 million expense,
pretax, for the nine months ended February 28, 2013 and February
29, 2012, respectively) |
(813) |
647 |
(628) |
626 |
Loss on extinguishment of long-term debt
($0.1 million, pre-tax, for each of the three and nine months ended
February 29, 2012) |
-- |
75 |
-- |
70 |
Adjusted net income (Non-GAAP) |
$ 1,938 |
$ 3,759 |
$ 15,567 |
$ 14,917 |
|
|
|
|
|
Adjusted diluted earnings per
share |
|
|
|
|
Diluted earnings per common share (GAAP) |
$ 0.09 |
$ 0.11 |
$ 0.56 |
$ 0.50 |
Acquisition-related expense/Loss on
extinguishment of long-term debt |
(0.02) |
0.02 |
(0.02) |
0.02 |
Adjusted diluted earnings per share
(Non-GAAP) |
$ 0.07 |
$ 0.13 |
$ 0.54 |
$ 0.52 |
CONTACT: Nestor S. Makarigakis
Manager of Marketing Communications
marcom@mistrasgroup.com
1(609)716-4000
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