Mistras Group, Inc. (NYSE:MG), a leading "one source" global
provider of technology-enabled asset protection solutions, reported
financial results for its abbreviated fiscal period (the “2016 stub
period”) which commenced on June 1, 2016 and ended December 31,
2016. The 2016 stub period is a result of the Company's
previously announced change in its fiscal year to December 31 in
order to better align the Company's budgeting and planning cycles
with those of its customers.
Revenues for the 2016 stub period were $404.2 million, or 6%
lower than in the comparable period of 2015. Net income
during the 2016 stub period was $9.6 million or $0.32 per diluted
share, both measures reflecting declines of approximately 50%
compared with the comparable period of 2015. Included in the 2016
stub period were pre-tax charges aggregating approximately $5
million, primarily associated with the acceleration of certain
costs to align with the Company's new December 31 fiscal year-end,
and other charges which included severance and the write-off of an
intangible asset.
The Company generated $30.3 million of cash from operating
activities during the 2016 stub period and approximately $20
million in free cash flow, defined as cash flow from operating
activities less cash used to purchase property, plant and equipment
and intangible assets. The Company utilized its free cash flow
during the 2016 stub period for acquisitions ($8.3 million) and to
repurchase $9 million of stock. The Company’s net debt (total debt
less cash) of $84.3 million at December 31, 2016 was approximately
1.1x Adjusted EBITDA.
Adjusted EBITDA for the 2016 stub period was $43 million, or
10.6% of revenues, compared with $58 million in the comparable
period of the prior year. The decline of $15 million was almost
entirely driven by the Company’s Services segment, which
experienced a weaker than expected fall 2016 turnaround season.
Dr. Sotirios Vahaviolos, Chairman and Chief Executive Officer
stated, "As mentioned in our recent earnings calls, the fall 2016
season was an especially challenging market in North America, as
workloads from many customers were less than in prior year. These
conditions caused results in our Services segment to suffer a poor
comparison to prior year that more than offset continued positive
performance in our International segment. Having realized strong
improvements in our fiscal year that ended May 31, 2016, the fall
off that we experienced in the second half of calendar 2016 was
very disappointing.”
Dr. Vahaviolos added: “Unfortunately, the market has not yet
rebounded in the spring of 2017. We are using this time to make
further adjustments to our cost structure, and to enhance our
competitive position by adding capabilities that will help our
customers in new and exciting ways. We will use 2017 to position
Mistras to drive incrementally more value for our customers, and to
make investments that will reignite our profitable growth in 2018
and beyond. "
Planning Assumptions and Guidance for 2017
The Company is introducing its planning assumptions and guidance
for fiscal year 2017 that commenced on January 1, 2017. The Company
expects that the present range for petroleum prices will persist
for the foreseeable future, causing oil and gas customer spend for
inspection services to be correspondingly flat to down.
Information obtained from North American oil and gas customers
suggests that their spending in the first half of calendar 2017
will continue to trend lower than prior year, albeit at a lower
rate of decline than in the fall of 2016. Spending levels are
expected to pick up modestly in the second half of 2017. The
Company’s results for the first half and second half of 2017 are
expected to reflect this dynamic.
Total revenues for 2017 are expected to be between $670 million
to $700 million, or roughly flat with calendar 2016 revenues of
$685 million. The Company’s net income for calendar 2016 was $16
million, including net of tax charges of approximately $5 million.
Net income for 2017 is expected to range from $20 million to $23
million. Earnings per diluted share is expected to range from 68
cents to 78 cents. Adjusted EBITDA for calendar year 2016 was
$74 million, or 11% of revenues. Adjusted EBITDA for calendar 2017
is expected to be between $73 million to $78 million.
The Company expects that its operating cash flow will
approximate $50 million, inclusive of funding over $6 million
pertaining to a prior year legal settlement. Capital expenditures
are expected to be approximately $20 million, inclusive of
approximately $5 million to be used to build out the Company’s
facilities and equipment to service its recent long-term contract
with Safran in France.
Conference Call
In connection with this release, Mistras will hold a conference
call on March 17, 2017 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 1-844-832-7227
and use confirmation code 88319215 when prompted. The International
dial-in number is 1-224-633-1529.
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; destructive testing 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.
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 2016 filed
with the Securities and Exchange Commission on August 15, 2016, 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 and Unaudited Proforma
Financial InformationIn addition to financial information
prepared in accordance with generally accepted accounting
principles in the U.S. (GAAP), this press release also contains
adjusted financial measures that we believe provide investors and
management with supplemental information relating to operating
performance and trends that facilitate comparisons between periods
and with respect to projected information. These adjusted financial
measures are non-GAAP and should be considered in addition to, but
not as a substitute for, the information prepared in accordance
with GAAP. We typically exclude certain GAAP items that management
does not believe affect our basic operations and that do not meet
the GAAP definition of unusual or non-recurring items. Other
companies may define these measures in different ways. The term
"Adjusted EBITDA" used in this release is a financial measurement
not calculated in accordance with GAAP. A Reconciliation of
Adjusted EBITDA to a financial measurement under GAAP is set forth
in a table attached to this press release. In addition, the Company
has also included in the attached tables non-GAAP measurement”
“Segment and Total Company Income (Loss) Before Special Items”,
reconciling these measurements to financial measurements under
GAAP. The Company uses the term “free cash flow”, a non-GAAP
measurement the Company defines as free cash flow as cash provided
by operating activities less capital expenditures (which is
classified as an investing activity). Free cash flow does not
represent residual cash flow available for discretionary
expenditures since items such as debt repayments are not deducted
in determining such measures. The Company also uses the term
“net debt”, a non-GAAP measurement defined as the sum of the
current and long-term portions of long-term debt and capital lease
obligations, less cash and cash equivalents. The Company believes
that investors and other users of the financial statements benefit
from the presentation of these non-GAAP measurements 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.
The accompanying unaudited proforma summary operating
information and unaudited proforma reconciliations of net income to
Adjusted EBITDA for each of the 2016 and 2015 quarterly periods and
calendar years presented has been prepared as-if the Company had
historically reported on a calendar year basis. Certain
assumptions have been made in preparing the information on this
basis.
|
Mistras Group, Inc. and
Subsidiaries |
Consolidated Balance Sheets |
(in thousands, except share and per share
data) |
|
|
|
December 31, 2016 |
|
May 31, 2016 |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and
cash equivalents |
|
$ |
19,154 |
|
|
$ |
21,188 |
|
Accounts
receivable, net |
|
130,852 |
|
|
137,913 |
|
Inventories |
|
10,017 |
|
|
9,918 |
|
Deferred
income taxes |
|
6,230 |
|
|
6,216 |
|
Prepaid
expenses and other current assets |
|
16,399 |
|
|
12,711 |
|
Total
current assets |
|
182,652 |
|
|
187,946 |
|
Property, plant and
equipment, net |
|
73,149 |
|
|
78,676 |
|
Intangible assets,
net |
|
40,007 |
|
|
43,492 |
|
Goodwill |
|
169,940 |
|
|
169,220 |
|
Deferred income
taxes |
|
1,086 |
|
|
1,000 |
|
Other assets |
|
2,593 |
|
|
2,341 |
|
Total
Assets |
|
$ |
469,427 |
|
|
$ |
482,675 |
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current
Liabilities |
|
|
|
|
Accounts
payable |
|
$ |
6,805 |
|
|
$ |
10,796 |
|
Accrued
expenses and other current liabilities |
|
58,697 |
|
|
62,983 |
|
Current
portion of long-term debt |
|
1,379 |
|
|
12,553 |
|
Current
portion of capital lease obligations |
|
6,488 |
|
|
7,835 |
|
Income
taxes payable |
|
4,342 |
|
|
2,710 |
|
Total
current liabilities |
|
77,711 |
|
|
96,877 |
|
Long-term debt, net of
current portion |
|
85,917 |
|
|
72,456 |
|
Obligations under
capital leases, net of current portion |
|
9,682 |
|
|
11,932 |
|
Deferred income
taxes |
|
17,584 |
|
|
18,328 |
|
Other long-term
liabilities |
|
7,789 |
|
|
6,794 |
|
Total
Liabilities |
|
198,683 |
|
|
206,387 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Preferred
stock, 10,000,000 shares authorized |
|
— |
|
|
— |
|
Common
stock, $0.01 par value, 200,000,000 shares authorized, 29,216,745
and 28,939,993 shares issued |
|
292 |
|
|
290 |
|
Additional paid-in capital |
|
217,211 |
|
|
213,737 |
|
Treasury
stock at cost, 420,258 and 0 shares |
|
(9,000 |
) |
|
— |
|
Retained
earnings |
|
91,803 |
|
|
82,235 |
|
Accumulated other comprehensive loss |
|
(29,724 |
) |
|
(20,099 |
) |
Total
Mistras Group, Inc. stockholders’ equity |
|
270,582 |
|
|
276,163 |
|
Noncontrolling interests |
|
162 |
|
|
125 |
|
Total
Equity |
|
270,744 |
|
|
276,288 |
|
Total
Liabilities and Equity |
|
$ |
469,427 |
|
|
$ |
482,675 |
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Consolidated Statements of
Income |
(in thousands, except per share
data) |
|
|
|
Stub period ended |
|
|
December 31, 2016 |
|
December 31, 2015 |
Revenue |
|
$ |
404,161 |
|
|
$ |
427,913 |
|
Cost of
revenue |
|
274,298 |
|
|
292,718 |
|
Depreciation |
|
12,859 |
|
|
12,005 |
|
Gross
profit |
|
117,004 |
|
|
123,190 |
|
Selling,
general and administrative expenses |
|
91,058 |
|
|
81,117 |
|
Research
and engineering |
|
1,577 |
|
|
1,431 |
|
Depreciation and amortization |
|
6,340 |
|
|
6,503 |
|
Acquisition-related expense (benefit), net |
|
496 |
|
|
(959 |
) |
Income from
operations |
|
17,533 |
|
|
35,098 |
|
Interest
expense |
|
2,052 |
|
|
3,672 |
|
Income before
provision for income taxes |
|
15,481 |
|
|
31,426 |
|
Provision
for income taxes |
|
5,870 |
|
|
11,627 |
|
Net
income |
|
9,611 |
|
|
19,799 |
|
Less: net
income (loss) attributable to noncontrolling interests, net of
taxes |
|
43 |
|
|
(15 |
) |
Net income
attributable to Mistras Group, Inc. |
|
$ |
9,568 |
|
|
$ |
19,814 |
|
Earnings per common
share |
|
|
|
|
Basic |
|
$ |
0.33 |
|
|
$ |
0.69 |
|
Diluted |
|
$ |
0.32 |
|
|
$ |
0.67 |
|
Weighted average common
shares outstanding: |
|
|
|
|
Basic |
|
28,989 |
|
|
28,810 |
|
Diluted |
|
30,125 |
|
|
29,676 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Operating Data by
Segment |
(in thousands) |
|
|
Stub Period Ended |
|
December 31, 2016 |
|
December 31, 2015 |
Revenues |
|
|
|
Services |
$ |
293,218 |
|
|
$ |
327,118 |
|
International |
104,013 |
|
|
87,411 |
|
Products
and Systems |
14,541 |
|
|
18,786 |
|
Corporate
and eliminations |
(7,611 |
) |
|
(5,402 |
) |
|
$ |
404,161 |
|
|
$ |
427,913 |
|
|
|
|
|
|
|
|
|
|
Stub Period Ended |
|
December 31, 2016 |
|
December 31, 2015 |
Gross
profit |
|
|
|
Services |
$ |
75,784 |
|
|
$ |
87,514 |
|
International |
34,210 |
|
|
26,762 |
|
Products
and Systems |
6,920 |
|
|
8,986 |
|
Corporate
and eliminations |
90 |
|
|
(72 |
) |
|
$ |
117,004 |
|
|
$ |
123,190 |
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
|
Unaudited Reconciliation of |
|
Segment and Total Company Income (Loss) from
Operations (GAAP) to Income before Special Items
(non-GAAP) |
|
(in thousands) |
|
|
Stub period ended |
|
|
December 31, 2016 |
|
December 31, 2015 |
|
Services: |
|
|
|
|
Income
from operations (GAAP) |
$ |
22,411 |
|
|
$ |
37,175 |
|
|
Severance
costs |
77 |
|
|
188 |
|
|
Acquisition-related expense (benefit), net |
236 |
|
|
(593 |
) |
|
Income
before special items (non-GAAP) |
22,724 |
|
|
36,770 |
|
|
|
|
|
|
|
International: |
|
|
|
|
Income
from operations (GAAP) |
10,597 |
|
|
6,888 |
|
|
Severance
costs |
474 |
|
|
175 |
|
|
Asset
write-offs and lease terminations |
1,042 |
|
|
— |
|
|
Acquisition-related expense (benefit), net |
29 |
|
|
(457 |
) |
|
Income
before special items (non-GAAP) |
12,142 |
|
|
6,606 |
|
|
|
|
|
|
|
Products and
Systems: |
|
|
|
|
(Loss)
income from operations (GAAP) |
(254 |
) |
|
2,613 |
|
|
Severance
costs |
14 |
|
|
17 |
|
|
(Loss)
income before special items (non-GAAP) |
(240 |
) |
|
2,630 |
|
|
|
|
|
|
|
Corporate and
Eliminations: |
|
|
|
|
Loss from
operations (GAAP) |
(15,221 |
) |
|
(11,578 |
) |
|
Severance
costs |
133 |
|
|
— |
|
|
Acquisition-related expense (benefit), net |
231 |
|
|
91 |
|
|
Loss
before special items (non-GAAP) |
(14,857 |
) |
|
(11,487 |
) |
|
|
|
|
|
|
Total
Company |
|
|
|
|
Income
from operations (GAAP) |
$ |
17,533 |
|
|
$ |
35,098 |
|
|
Severance
costs |
$ |
698 |
|
|
$ |
380 |
|
|
Asset
write-offs and lease terminations |
$ |
1,042 |
|
|
$ |
— |
|
|
Acquisition-related expense (benefit), net |
$ |
496 |
|
|
$ |
(959 |
) |
|
Income
before special items (non-GAAP) |
$ |
19,769 |
|
|
$ |
34,519 |
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Summary Cash Flow
Information |
(in thousands) |
|
|
Stub period ended |
|
December 31, 2016 |
|
|
Net cash provided by
(used in): |
|
Operating
activities |
$ |
30,259 |
|
Investing
activities |
(17,374 |
) |
Financing
activities |
(12,869 |
) |
Effect of exchange rate
changes on cash |
(2,050 |
) |
Net change in cash and
cash equivalents |
$ |
(2,034 |
) |
|
|
Mistras Group, Inc. and
Subsidiaries |
Reconciliation of Net Cash Provided from
Operating Activities (GAAP) to Free Cash Flow
(non-GAAP) |
(in thousands) |
|
|
|
Stub Period ended December 31,
2016 |
GAAP: Net cash
provided from operating activities |
|
$ |
30,259 |
|
Less: |
|
|
Purchase
of property, plant and equipment |
|
(9,093 |
) |
Purchase
of intangible assets |
|
(697 |
) |
non-GAAP: Free cash
flow |
|
$ |
20,469 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Reconciliation of |
Net Income to Adjusted EBITDA |
(in thousands) |
|
|
Stub period ended |
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
Net
income |
$ |
9,611 |
|
|
$ |
19,799 |
|
Less: net
income (loss) attributable to noncontrolling interests, net of
taxes |
43 |
|
|
(15 |
) |
Net income attributable
to Mistras Group, Inc. |
$ |
9,568 |
|
|
$ |
19,814 |
|
Interest expense |
2,052 |
|
|
3,672 |
|
Provision for income
taxes |
5,870 |
|
|
11,627 |
|
Depreciation and
amortization |
19,199 |
|
|
18,508 |
|
Share-based
compensation expense |
4,601 |
|
|
3,792 |
|
Acquisition-related
expense (benefit), net |
496 |
|
|
(959 |
) |
Severance |
698 |
|
|
380 |
|
Foreign exchange (gain)
loss |
(675 |
) |
|
728 |
|
Asset write-offs and
lease terminations |
1,042 |
|
|
— |
|
Adjusted
EBITDA |
$ |
42,851 |
|
|
$ |
57,562 |
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Reconciliation of |
Estimated Adjusted EBITDA and Estimated Net
Income for 2017 |
(in millions) |
|
|
For the Year Ended December 31,
2017 |
|
Low |
|
High |
Estimated Net
Income |
$ |
20.0 |
|
|
$ |
23.0 |
|
Interest
expense |
3.5 |
|
|
3.5 |
|
Provision
for income taxes |
11.0 |
|
|
13.0 |
|
Depreciation and amortization |
31.5 |
|
|
31.5 |
|
Share-based compensation expense |
7.0 |
|
|
7.0 |
|
Estimated
Adjusted EBITDA |
$ |
73.0 |
|
|
$ |
78.0 |
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Proforma Summary of Operating
Information |
(in thousands, except per share
data) |
|
|
Three Months Ended |
|
Year Ended |
|
3/31/2016 |
|
6/30/2016 |
|
9/30/2016 |
|
12/31/2016 |
|
2016 |
Revenue |
$ |
167,455 |
|
|
$ |
178,340 |
|
|
$ |
168,811 |
|
|
$ |
170,156 |
|
|
$ |
684,762 |
|
Cost of
revenue |
118,229 |
|
|
121,044 |
|
|
112,754 |
|
|
116,902 |
|
|
468,929 |
|
Depreciation |
5,256 |
|
|
5,761 |
|
|
5,406 |
|
|
5,276 |
|
|
21,699 |
|
Gross
profit |
43,970 |
|
|
51,535 |
|
|
50,651 |
|
|
47,978 |
|
|
194,134 |
|
Selling,
general and administrative expenses |
35,054 |
|
|
43,537 |
|
|
34,995 |
|
|
39,713 |
|
|
153,299 |
|
Research
and engineering |
662 |
|
|
623 |
|
|
643 |
|
|
742 |
|
|
2,670 |
|
Depreciation and amortization |
2,762 |
|
|
2,865 |
|
|
2,513 |
|
|
2,549 |
|
|
10,689 |
|
Acquisition-related expense (benefit), net |
(153 |
) |
|
(330 |
) |
|
384 |
|
|
94 |
|
|
(5 |
) |
Income from
operations |
5,645 |
|
|
4,840 |
|
|
12,116 |
|
|
4,880 |
|
|
27,481 |
|
Interest
expense |
1,100 |
|
|
340 |
|
|
778 |
|
|
857 |
|
|
3,075 |
|
Income before
provision for income taxes |
4,545 |
|
|
4,500 |
|
|
11,338 |
|
|
4,023 |
|
|
24,406 |
|
Provision
for income taxes |
1,088 |
|
|
1,737 |
|
|
4,083 |
|
|
1,581 |
|
|
8,489 |
|
Net
income |
3,457 |
|
|
2,763 |
|
|
7,255 |
|
|
2,442 |
|
|
15,917 |
|
Less: net
income attributable to noncontrolling interests, net of taxes |
10 |
|
|
2 |
|
|
17 |
|
|
20 |
|
|
49 |
|
Net income
attributable to Mistras Group, Inc. |
$ |
3,447 |
|
|
$ |
2,761 |
|
|
|
$ |
7,238 |
|
|
|
$ |
2,422 |
|
|
|
$ |
15,868 |
|
Earnings per common
share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.12 |
|
|
$ |
0.10 |
|
|
$ |
0.25 |
|
|
$ |
0.08 |
|
|
$ |
0.55 |
|
Diluted |
$ |
0.12 |
|
|
$ |
0.09 |
|
|
$ |
0.24 |
|
|
$ |
0.08 |
|
|
$ |
0.53 |
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
28,915 |
|
|
28,932 |
|
|
29,051 |
|
|
28,943 |
|
|
28,960 |
|
Diluted |
29,966 |
|
|
30,152 |
|
|
30,231 |
|
|
29,920 |
|
|
30,114 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Proforma Reconciliation of Net
Income to Adjusted EBITDA |
and Unaudited Proforma Segment
Data |
(in thousands, except per share
data) |
|
|
Three Months Ended |
|
Year Ended |
|
3/31/2016 |
|
6/30/2016 |
|
9/30/2016 |
|
12/31/2016 |
|
2016 |
Net
income |
$ |
3,457 |
|
|
$ |
2,763 |
|
|
$ |
7,255 |
|
|
$ |
2,442 |
|
|
$ |
15,917 |
|
Less: net
income attributable to noncontrolling interests, net of taxes |
10 |
|
|
2 |
|
|
17 |
|
|
20 |
|
|
49 |
|
Net income attributable
to Mistras Group, Inc. |
3,447 |
|
|
2,761 |
|
|
|
7,238 |
|
|
|
2,422 |
|
|
|
15,868 |
|
Interest expense |
1,100 |
|
|
340 |
|
|
778 |
|
|
857 |
|
|
3,075 |
|
Provision for income
taxes |
1,088 |
|
|
1,737 |
|
|
4,083 |
|
|
1,581 |
|
|
8,489 |
|
Depreciation and
amortization |
8,018 |
|
|
8,626 |
|
|
7,919 |
|
|
7,825 |
|
|
32,388 |
|
Share-based
compensation expense |
1,729 |
|
|
1,466 |
|
|
1,966 |
|
|
2,163 |
|
|
7,324 |
|
Acquisition-related
expense (benefit), net |
(153 |
) |
|
(330 |
) |
|
384 |
|
|
94 |
|
|
(5 |
) |
Severance |
54 |
|
|
673 |
|
|
265 |
|
|
433 |
|
|
1,425 |
|
Foreign exchange (gain)
loss |
(282 |
) |
|
(237 |
) |
|
(835 |
) |
|
(11 |
) |
|
(1,365 |
) |
Legal settlement |
— |
|
|
6,320 |
|
|
— |
|
|
— |
|
|
6,320 |
|
Adjusted
EBITDA |
$ |
15,001 |
|
|
$ |
21,356 |
|
|
$ |
21,798 |
|
|
$ |
15,364 |
|
|
$ |
73,519 |
|
|
|
|
|
|
|
|
|
|
|
Segment Data: |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Services |
$ |
131,579 |
|
|
$ |
136,358 |
|
|
$ |
127,153 |
|
|
$ |
124,289 |
|
|
$ |
519,379 |
|
International |
30,980 |
|
|
36,373 |
|
|
37,922 |
|
|
43,486 |
|
|
148,761 |
|
Products |
6,680 |
|
|
6,467 |
|
|
6,807 |
|
|
6,094 |
|
|
26,048 |
|
Corporate
and Eliminations |
(1,784 |
) |
|
(858 |
) |
|
(3,071 |
) |
|
(3,713 |
) |
|
(9,426 |
) |
|
$ |
167,455 |
|
|
$ |
178,340 |
|
|
$ |
168,811 |
|
|
$ |
170,156 |
|
|
$ |
684,762 |
|
Operating Income |
|
|
|
|
|
|
|
|
|
Services |
$ |
11,339 |
|
|
$ |
7,372 |
|
|
$ |
12,221 |
|
|
$ |
6,856 |
|
|
$ |
37,788 |
|
International |
720 |
|
|
2,454 |
|
|
5,751 |
|
|
5,918 |
|
|
14,843 |
|
Products |
(132 |
) |
|
(114 |
) |
|
806 |
|
|
(740 |
) |
|
(180 |
) |
Corporate
and Eliminations |
(6,282 |
) |
|
(4,872 |
) |
|
(6,662 |
) |
|
(7,154 |
) |
|
(24,970 |
) |
|
$ |
5,645 |
|
|
$ |
4,840 |
|
|
$ |
12,116 |
|
|
$ |
4,880 |
|
|
$ |
27,481 |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Services |
$ |
16,773 |
|
|
$ |
19,467 |
|
|
$ |
18,111 |
|
|
$ |
12,121 |
|
|
$ |
66,472 |
|
International |
2,288 |
|
|
4,954 |
|
|
6,994 |
|
|
8,365 |
|
|
22,601 |
|
Products |
445 |
|
|
492 |
|
|
1,358 |
|
|
(88 |
) |
|
2,207 |
|
Corporate
and Eliminations |
(4,505 |
) |
|
(3,557 |
) |
|
(4,665 |
) |
|
(5,034 |
) |
|
(17,761 |
) |
|
$ |
15,001 |
|
|
$ |
21,356 |
|
|
$ |
21,798 |
|
|
$ |
15,364 |
|
|
$ |
73,519 |
|
Mistras Group, Inc. and Subsidiaries
Unaudited Proforma Summary of Operating Information (in thousands,
except per share data) |
|
|
Three Months Ended |
|
Year Ended |
|
3/31/2015 |
|
6/30/2015 |
|
9/30/2015 |
|
12/31/2015 |
|
2015 |
Revenue |
$ |
168,873 |
|
|
$ |
170,932 |
|
|
$ |
187,173 |
|
|
$ |
184,306 |
|
|
$ |
711,284 |
|
Cost of
revenue |
121,036 |
|
|
122,005 |
|
|
127,391 |
|
|
125,044 |
|
|
495,476 |
|
Depreciation |
5,225 |
|
|
5,270 |
|
|
5,188 |
|
|
5,135 |
|
|
20,818 |
|
Gross
profit |
42,612 |
|
|
43,657 |
|
|
54,594 |
|
|
54,127 |
|
|
194,990 |
|
Selling,
general and administrative expenses |
32,814 |
|
|
39,256 |
|
|
34,241 |
|
|
34,408 |
|
|
140,719 |
|
Research
and engineering |
637 |
|
|
539 |
|
|
661 |
|
|
603 |
|
|
2,440 |
|
Depreciation and amortization |
3,047 |
|
|
3,009 |
|
|
2,714 |
|
|
2,788 |
|
|
11,558 |
|
Acquisition-related expense (benefit), net |
(1,656 |
) |
|
(2,131 |
) |
|
(883 |
) |
|
(76 |
) |
|
(4,746 |
) |
Income from
operations |
7,770 |
|
|
2,984 |
|
|
17,861 |
|
|
16,404 |
|
|
45,019 |
|
Interest
expense |
1,181 |
|
|
1,155 |
|
|
1,960 |
|
|
1,360 |
|
|
5,656 |
|
Income before
provision for income taxes |
6,589 |
|
|
1,829 |
|
|
15,901 |
|
|
15,044 |
|
|
39,363 |
|
Provision
for income taxes |
2,479 |
|
|
689 |
|
|
5,982 |
|
|
5,659 |
|
|
14,809 |
|
Net
income |
4,110 |
|
|
1,140 |
|
|
9,919 |
|
|
9,385 |
|
|
24,554 |
|
Less: net
income (loss) attributable to noncontrolling interests, net of
taxes |
(51 |
) |
|
(35 |
) |
|
(20 |
) |
|
9 |
|
|
(97 |
) |
Net income
attributable to Mistras Group, Inc. |
$ |
4,161 |
|
|
$ |
1,175 |
|
|
|
$ |
9,939 |
|
|
|
$ |
9,376 |
|
|
|
$ |
24,651 |
|
Earnings per common
share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
0.04 |
|
|
$ |
0.35 |
|
|
$ |
0.32 |
|
|
$ |
0.86 |
|
Diluted |
$ |
0.14 |
|
|
$ |
0.04 |
|
|
$ |
0.34 |
|
|
$ |
0.32 |
|
|
$ |
0.83 |
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
28,683 |
|
|
28,703 |
|
|
28,776 |
|
|
28,878 |
|
|
28,760 |
|
Diluted |
29,595 |
|
|
29,638 |
|
|
29,524 |
|
|
29,720 |
|
|
29,632 |
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Proforma Reconciliation of Net
Income to Adjusted EBITDA and Unaudited Proforma Segment
Data |
(in thousands, except per share
data) |
|
|
Three Months Ended |
|
Year Ended |
|
3/31/2015 |
|
6/30/2015 |
|
9/30/2015 |
|
12/31/2015 |
|
2015 |
Net
income |
$ |
4,110 |
|
|
$ |
1,140 |
|
|
$ |
9,919 |
|
|
$ |
9,385 |
|
|
$ |
24,554 |
|
Less: net
income (loss) attributable to noncontrolling interests, net of
taxes |
(51 |
) |
|
(35 |
) |
|
(20 |
) |
|
9 |
|
|
(97 |
) |
Net income attributable
to Mistras Group, Inc. |
4,161 |
|
|
1,175 |
|
|
|
9,939 |
|
|
|
9,376 |
|
|
|
24,651 |
|
Interest expense |
1,181 |
|
|
1,155 |
|
|
1,960 |
|
|
1,360 |
|
|
5,656 |
|
Provision for income
taxes |
2,479 |
|
|
689 |
|
|
5,982 |
|
|
5,659 |
|
|
14,809 |
|
Depreciation and
amortization |
8,272 |
|
|
8,279 |
|
|
7,902 |
|
|
7,923 |
|
|
32,376 |
|
Share-based
compensation expense |
458 |
|
|
1,694 |
|
|
1,909 |
|
|
1,304 |
|
|
5,365 |
|
Acquisition-related
expense (benefit), net |
(1,656 |
) |
|
(2,131 |
) |
|
(883 |
) |
|
(76 |
) |
|
(4,746 |
) |
Severance |
160 |
|
|
1,186 |
|
|
60 |
|
|
320 |
|
|
1,726 |
|
Foreign exchange (gain)
loss |
127 |
|
|
640 |
|
|
(214 |
) |
|
399 |
|
|
952 |
|
Charges related to exit
of foreign operations |
— |
|
|
2,516 |
|
|
— |
|
|
— |
|
|
2,516 |
|
Asset write-offs and
lease terminations |
— |
|
|
1,029 |
|
|
— |
|
|
— |
|
|
1,029 |
|
Adjusted
EBITDA |
$ |
15,182 |
|
|
$ |
16,232 |
|
|
$ |
26,655 |
|
|
$ |
26,265 |
|
|
$ |
84,334 |
|
|
|
|
|
|
|
|
|
|
|
Segment Data: |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Services |
$ |
131,161 |
|
|
$ |
132,626 |
|
|
$ |
143,249 |
|
|
$ |
139,263 |
|
|
$ |
546,299 |
|
International |
30,854 |
|
|
32,715 |
|
|
37,936 |
|
|
38,964 |
|
|
140,469 |
|
Products |
8,603 |
|
|
7,980 |
|
|
8,916 |
|
|
7,569 |
|
|
33,068 |
|
Corporate and Eliminations |
(1,745 |
) |
|
(2,389 |
) |
|
(2,928 |
) |
|
(1,490 |
) |
|
(8,552 |
) |
|
$ |
168,873 |
|
|
$ |
170,932 |
|
|
$ |
187,173 |
|
|
$ |
184,306 |
|
|
$ |
711,284 |
|
Operating Income |
|
|
|
|
|
|
|
|
|
Services |
$ |
11,689 |
|
|
$ |
12,821 |
|
|
$ |
17,584 |
|
|
$ |
15,584 |
|
|
$ |
57,678 |
|
International |
(2,190 |
) |
|
(1,845 |
) |
|
3,343 |
|
|
4,543 |
|
|
3,851 |
|
Products |
1,586 |
|
|
538 |
|
|
1,526 |
|
|
1,011 |
|
|
4,661 |
|
Corporate and Eliminations |
(3,315 |
) |
|
(8,530 |
) |
|
(4,592 |
) |
|
(4,734 |
) |
|
(21,171 |
) |
|
$ |
7,770 |
|
|
$ |
2,984 |
|
|
$ |
17,861 |
|
|
$ |
16,404 |
|
|
$ |
45,019 |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Services |
$ |
16,135 |
|
|
$ |
17,037 |
|
|
$ |
22,178 |
|
|
$ |
21,548 |
|
|
$ |
76,898 |
|
International |
(675 |
) |
|
1,481 |
|
|
5,646 |
|
|
6,429 |
|
|
12,881 |
|
Products |
2,198 |
|
|
1,232 |
|
|
2,093 |
|
|
1,611 |
|
|
7,134 |
|
Corporate and Eliminations |
(2,476 |
) |
|
(3,518 |
) |
|
(3,262 |
) |
|
(3,323 |
) |
|
(12,579 |
) |
|
$ |
15,182 |
|
|
$ |
16,232 |
|
|
$ |
26,655 |
|
|
$ |
26,265 |
|
|
$ |
84,334 |
|
Media Contact:
Nestor S. Makarigakis, Group Director of Marketing Communications,
marcom@mistrasgroup.com
1(609)716-4000
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