Record Annual Revenue of $742
million
MISTRAS Group, Inc. (MG: NYSE), a leading "one source" global
provider of technology-enabled asset protection solutions, reported
financial results for its fourth quarter and year ended December
31, 2018.
For the full year 2018, consolidated revenues grew 6% to a
record $742 million reflecting both organic growth and the impact
of strategic acquisitions. For the year, consolidated gross
profit was up nearly 11% over 2017 to $208 million as the
consolidated gross margin expanded by 120 basis points to 28.0%
compared with 26.8% in the prior year. Adjusted EBITDA for
the full year increased 15% to $73 million. All three of the
company’s business segments reported increased gross profit, gross
margin and adjusted EBITDA for the full year 2018.
Chief Executive Officer Dennis Bertolotti stated, "I am pleased
to have achieved record revenue, while expanding gross margins
across all three segments in 2018. We ended the year with
strong momentum, with fourth quarter consolidated gross margin
reaching 28.9%, the best fourth quarter margin in three
years. Results for the year reflect the progress being
achieved in positioning MISTRAS for continued growth and improved
returns. In 2018, we exited from certain lower margin
contracts, which reduced organic revenue growth, but contributed to
improved margins. Our acquisition strategy continues to
provide incremental growth and for the full year 2018, contributed
nicely to margin expansion. I am very excited about our
recent Onstream acquisition, which further diversifies our
midstream business into the in-line pipeline inspection
market. Onstream also helps accelerate the implementation of
our MISTRAS digital solutions initiative and provides another
fundamental building block for our overall technology map.
Our acquisition funnel remains active with potential tuck-in
opportunities that would strengthen and diversify our business. We
intend to continue to pursue these growth avenues to take advantage
of what we expect will be a market that continues to improve
throughout 2019. The stability of our pipeline
integrity operation, growing aerospace business and our expansion
into mechanical services should enable continued improvement in
2019 and in the years to come.”
Performance by segment, both during the quarter and year to date
was as follows:
Services segment fourth quarter revenues
decreased by $6 million or 4%. The current period is compared
to a year ago fourth quarter that included incremental revenue from
previously deferred projects that were released in the prior year
period. Full year 2018 revenues increased by $31 million or
6% over prior year period attributable to acquisitions as well as
organic growth despite the impact of the nonrenewal of a large
contract. The impact of this more disciplined growth strategy
can be seen in Services segment gross profit margins, which
improved 90 basis points in the fourth quarter to 27.4% despite the
lower revenue levels. For the full year 2018 the gross profit
margin was 26.4%, an 80 basis point improvement over the prior year
period.
International segment fourth quarter revenues
decreased by $0.7 million or 2%, primarily due to unfavorable
currency translation, offset by organic growth. Fourth quarter
revenues were up in local currency. Full year 2018 revenues
increased by $9 million or 6% over prior year period attributable
to a combination of organic growth and favorable foreign currency
translation. International segment gross profit margin was
30.1% in the fourth quarter, a 570 basis point improvement from the
year ago quarter while full year 2018 gross profit margin were up
260 basis points to 29.6%. Margins benefited from a more
favorable service and product mix reflective of the Company’s more
disciplined growth strategy.
Products and Systems segment revenue decreased
by $0.2 million or 4% in the fourth quarter compared to the prior
year period. Full year 2018 revenues were up modestly over
prior year period despite the product line divestment within this
segment during the third quarter of 2018. Products and Systems
segment gross profit margin improved by 750 basis points to 46.5%
in the fourth quarter and by 300 basis points to 45.1% for the full
year 2018.
The Company generated $41.7 million of cash flows from operating
activities and $20.5 million of free cash flow for full year
2018.
The Company’s net debt (total debt less cash and cash
equivalents of $25.5 million) was $265.1 million at December 31,
2018, compared to $139.3 million at December 31, 2017. This
increase in net debt was primarily attributable to the Onstream
Acquisition, which closed during the fourth quarter of 2018.
Guidance for 2019The Company is introducing its
planning assumptions and guidance for 2019.
Total
revenues expected to be between $765 million to $785
million;Adjusted EBITDA expected to be between $90 million and $93
million;Capital expenditures expected to be up to $25 million;
andFree cash flow expected to be between $42 million and $45
million. |
Year over year comparable will not be linear in 2019, because of
the first quarter of 2019 lapping a year ago quarter that included
more than $10 million of Services revenue from a large contract
nonrenewal. Beginning in the first quarter of 2019 we
will commence the exit of the staff leasing business in Germany,
representing a further reduction of approximately $13 million in
full year 2019 revenues. The Company believes that it
can offset the effect of the revenue decreases through continuing
margin expansion as was demonstrated throughout 2018.
Conference CallIn connection with this release,
MISTRAS will hold a conference call on March 12, 2019 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
dial 1-844-832-7227 and use confirmation code 1092346 when
prompted. The International dial-in number is 1-224-633-1529.
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; 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 or contact Nestor S. Makarigakis, Group
Director, Marketing Communications at marcom@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 filed with the
Securities and Exchange Commission on March 14, 2018, 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
In 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. The term "Adjusted EBITDA" used in this
release is a financial measurement not calculated in accordance
with GAAP and is defined as net income attributable to MISTRAS
Group, Inc. plus: interest expense, provision for income taxes,
depreciation and amortization, share-based compensation expense and
certain acquisition related costs (including transaction due
diligence costs and adjustments to the fair value of contingent
consideration), foreign exchange (gain) loss and, if applicable,
certain special items which are noted. A Reconciliation of Adjusted
EBITDA to a financial measurement under GAAP is set forth in a
table attached to this press release. In the press release, the
Company also uses the term “non-GAAP Net Income,” which is GAAP net
income adjusted for certain items management believes are unusual
and non-recurring. In the tables attached is a table
reconciling “Net Income (Loss) (GAAP)” to “Net Income Excluding
Special Items (non-GAAP)” which reconciles the non-GAAP amount to a
GAAP measurement. 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
cash provided by operating activities less capital expenditures
(which is classified as an investing activity). 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,
less cash and cash equivalents.
Media Contact:Nestor S. Makarigakis, Group
Director of Marketing Communicationsmarcom@mistrasgroup.com1 (609)
716-4000
Mistras Group, Inc. and
SubsidiariesConsolidated Balance
Sheets(in thousands, except share and per share
data)
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash
equivalents |
$ |
25,544 |
|
|
$ |
27,541 |
|
Accounts
receivable, net |
148,324 |
|
|
138,080 |
|
Inventories |
13,053 |
|
|
10,503 |
|
Prepaid
expenses and other current assets |
15,870 |
|
|
18,884 |
|
Total
current assets |
202,791 |
|
|
195,008 |
|
Property, plant and
equipment, net |
93,895 |
|
|
87,143 |
|
Intangible assets,
net |
111,395 |
|
|
63,739 |
|
Goodwill |
279,259 |
|
|
203,438 |
|
Deferred income
taxes |
1,930 |
|
|
1,606 |
|
Other assets |
4,767 |
|
|
3,507 |
|
Total
Assets |
$ |
694,037 |
|
|
$ |
554,441 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current
Liabilities |
|
|
|
Accounts
payable |
$ |
13,863 |
|
|
$ |
10,362 |
|
Accrued
expenses and other current liabilities |
73,895 |
|
|
65,561 |
|
Current
portion of long-term debt |
6,833 |
|
|
2,358 |
|
Current
portion of capital lease obligations |
3,922 |
|
|
5,875 |
|
Income
taxes payable |
1,958 |
|
|
6,069 |
|
Total
current liabilities |
100,471 |
|
|
90,225 |
|
Long-term debt, net of
current portion |
283,787 |
|
|
164,520 |
|
Obligations under
capital leases, net of current portion |
9,075 |
|
|
8,738 |
|
Deferred income
taxes |
23,148 |
|
|
8,803 |
|
Other long-term
liabilities |
6,482 |
|
|
11,363 |
|
Total
Liabilities |
422,963 |
|
|
283,649 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Preferred
stock, 10,000,000 shares authorized |
— |
|
|
— |
|
Common
stock, $0.01 par value, 200,000,000 shares authorized, 28,562,608
and 28,294,968 shares issued |
285 |
|
|
282 |
|
Additional paid-in capital |
226,616 |
|
|
222,425 |
|
Retained
earnings |
71,553 |
|
|
64,717 |
|
Accumulated other comprehensive loss |
(27,557 |
) |
|
(16,805 |
) |
Total
Mistras Group, Inc. stockholders’ equity |
270,897 |
|
|
270,619 |
|
Non-controlling interests |
177 |
|
|
173 |
|
Total
Equity |
271,074 |
|
|
270,792 |
|
Total
Liabilities and Equity |
$ |
694,037 |
|
|
$ |
554,441 |
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesConsolidated Statements of Income
(Loss)(in thousands, except per share
data)
|
For the three months ended December 31,
(unaudited) |
|
For the year ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
Revenue |
$ |
180,762 |
|
|
$ |
187,643 |
|
|
$ |
742,354 |
|
|
$ |
700,970 |
|
Cost of
revenue |
122,892 |
|
|
132,093 |
|
|
512,024 |
|
|
492,238 |
|
Depreciation |
5,555 |
|
|
5,230 |
|
|
22,456 |
|
|
21,020 |
|
Gross
profit |
52,315 |
|
|
50,320 |
|
|
207,874 |
|
|
187,712 |
|
Selling,
general and administrative expenses |
44,120 |
|
|
39,535 |
|
|
166,352 |
|
|
153,025 |
|
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
15,810 |
|
Pension
withdrawal expense |
— |
|
|
— |
|
|
5,886 |
|
|
— |
|
Gain on
sale of subsidiary |
— |
|
|
— |
|
|
(2,384 |
) |
|
— |
|
Research
and engineering |
896 |
|
|
521 |
|
|
3,310 |
|
|
2,272 |
|
Depreciation and amortization |
3,122 |
|
|
2,510 |
|
|
11,957 |
|
|
10,363 |
|
Acquisition-related expense (benefit), net |
1,675 |
|
|
1,071 |
|
|
532 |
|
|
482 |
|
Litigation charges |
— |
|
|
400 |
|
|
— |
|
|
1,600 |
|
Income from
operations |
2,502 |
|
|
6,283 |
|
|
22,221 |
|
|
4,160 |
|
Interest
expense |
2,370 |
|
|
1,273 |
|
|
7,950 |
|
|
4,386 |
|
Income (loss)
before provision for income taxes |
132 |
|
|
5,010 |
|
|
14,271 |
|
|
(226 |
) |
Provision
for income taxes |
1,197 |
|
|
4,141 |
|
|
7,426 |
|
|
1,942 |
|
Net (loss)
income |
(1,065 |
) |
|
869 |
|
|
$ |
6,845 |
|
|
$ |
(2,168 |
) |
Less: net
(loss) income attributable to noncontrolling interests, net of
taxes |
(4 |
) |
|
(15 |
) |
|
9 |
|
|
7 |
|
Net (loss)
income attributable to Mistras Group, Inc. |
$ |
(1,061 |
) |
|
$ |
884 |
|
|
$ |
6,836 |
|
|
$ |
(2,175 |
) |
(Loss) earnings per
common share |
|
|
|
|
|
|
|
Basic |
$ |
(0.04 |
) |
|
$ |
0.03 |
|
|
$ |
0.24 |
|
|
$ |
(0.08 |
) |
Diluted |
$ |
(0.04 |
) |
|
$ |
0.03 |
|
|
$ |
0.23 |
|
|
$ |
(0.08 |
) |
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
28,541 |
|
|
28,294 |
|
|
28,406 |
|
|
28,422 |
|
Diluted |
28,541 |
|
|
29,410 |
|
|
29,427 |
|
|
28,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
For the three months ended December
31, |
|
For the year ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
|
|
|
|
|
|
|
Services |
$ |
139,966 |
|
|
$ |
146,000 |
|
|
$ |
574,619 |
|
|
$ |
543,565 |
|
International |
37,210 |
|
|
37,906 |
|
|
153,448 |
|
|
144,265 |
|
Products
and Systems |
6,139 |
|
|
6,372 |
|
|
23,426 |
|
|
23,297 |
|
Corporate
and eliminations |
(2,553 |
) |
|
(2,635 |
) |
|
(9,139 |
) |
|
(10,157 |
) |
|
$ |
180,762 |
|
|
$ |
187,643 |
|
|
$ |
742,354 |
|
|
$ |
700,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended December
31, |
|
For the year ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Gross
profit |
|
|
|
|
|
|
|
Services |
$ |
38,299 |
|
|
$ |
38,728 |
|
|
$ |
151,974 |
|
|
$ |
139,160 |
|
International |
11,191 |
|
|
9,255 |
|
|
45,464 |
|
|
38,974 |
|
Products
and Systems |
2,854 |
|
|
2,485 |
|
|
10,560 |
|
|
9,798 |
|
Corporate
and eliminations |
(29 |
) |
|
(148 |
) |
|
(124 |
) |
|
(220 |
) |
|
$ |
52,315 |
|
|
$ |
50,320 |
|
|
$ |
207,874 |
|
|
$ |
187,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofSegment and Total Company Income from Operations
(GAAP) to Income before Special Items
(non-GAAP)(in thousands)
|
For the three months
ended December 31, |
|
For the year
ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Services: |
|
|
|
|
|
|
|
Income from operations
(GAAP) |
$ |
10,234 |
|
|
$ |
15,466 |
|
|
$ |
47,126 |
|
|
$ |
46,677 |
|
Pension
withdrawal expense |
— |
|
|
— |
|
|
5,886 |
|
|
— |
|
Bad debt
provision for troubled customers |
650 |
|
|
— |
|
|
650 |
|
|
1,200 |
|
Reorganization and other costs |
166 |
|
|
69 |
|
|
458 |
|
|
684 |
|
Acquisition-related expense, net |
1,385 |
|
|
440 |
|
|
576 |
|
|
392 |
|
Income
before special items (non-GAAP) |
12,435 |
|
|
15,975 |
|
|
54,696 |
|
|
48,953 |
|
|
|
|
|
|
|
|
|
International: |
|
|
|
|
|
|
|
Income
(loss) from operations (GAAP) |
1,240 |
|
|
(330 |
) |
|
3,953 |
|
|
3,537 |
|
Reorganization and other costs |
419 |
|
|
600 |
|
|
3,966 |
|
|
1,055 |
|
Acquisition-related (benefit), net |
— |
|
|
— |
|
|
(409 |
) |
|
(501 |
) |
Income
before special items (non-GAAP) |
1,659 |
|
|
270 |
|
|
7,510 |
|
|
4,091 |
|
|
|
|
|
|
|
|
|
Products and
Systems: |
|
|
|
|
|
|
|
Income
(loss) from operations (GAAP) |
336 |
|
|
(77 |
) |
|
2,368 |
|
|
(16,991 |
) |
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
15,810 |
|
Gain on
sale of subsidiary |
— |
|
|
— |
|
|
(2,384 |
) |
|
— |
|
Reorganization and other costs |
— |
|
|
18 |
|
|
29 |
|
|
18 |
|
Income
(loss) before special items (non-GAAP) |
336 |
|
|
(59 |
) |
|
13 |
|
|
(1,163 |
) |
|
|
|
|
|
|
|
|
Corporate and
Eliminations: |
|
|
|
|
|
|
|
Loss from
operations (GAAP) |
(9,308 |
) |
|
(8,776 |
) |
|
(31,226 |
) |
|
(29,063 |
) |
Litigation charges |
— |
|
|
400 |
|
|
— |
|
|
1,600 |
|
Reorganization and other costs |
— |
|
|
184 |
|
|
305 |
|
|
184 |
|
Acquisition-related expense, net |
290 |
|
|
631 |
|
|
365 |
|
|
591 |
|
Loss
before special items (non-GAAP) |
(9,018 |
) |
|
(7,561 |
) |
|
(30,556 |
) |
|
(26,688 |
) |
|
|
|
|
|
|
|
|
Total
Company: |
|
|
|
|
|
|
|
Income
from operations (GAAP) |
$ |
2,502 |
|
|
$ |
6,283 |
|
|
$ |
22,221 |
|
|
$ |
4,160 |
|
Litigation charges |
— |
|
|
400 |
|
|
— |
|
|
1,600 |
|
Pension
withdrawal expense |
— |
|
|
— |
|
|
5,886 |
|
|
— |
|
Gain on
sale of subsidiary |
— |
|
|
— |
|
|
(2,384 |
) |
|
— |
|
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
15,810 |
|
Bad debt
provision for troubled customers |
650 |
|
|
— |
|
|
650 |
|
|
1,200 |
|
Reorganization and other costs |
585 |
|
|
871 |
|
|
4,758 |
|
|
1,941 |
|
Acquisition-related expense, net |
1,675 |
|
|
1,071 |
|
|
532 |
|
|
482 |
|
Income
before special items (non-GAAP) |
$ |
5,412 |
|
|
$ |
8,625 |
|
|
$ |
31,663 |
|
|
$ |
25,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesSummary Cash Flow
Information(in thousands)
|
For the year ended December 31, |
|
|
2018 |
|
|
|
2017 |
|
Net cash provided by
(used in): |
|
|
|
Operating
activities |
$ |
41,664 |
|
|
$ |
55,799 |
|
Investing
activities |
|
(155,450 |
) |
|
|
(102,797 |
) |
Financing
activities |
|
113,969 |
|
|
|
53,045 |
|
Effect of exchange rate
changes on cash |
|
(2,180 |
) |
|
|
2,340 |
|
Net change in cash and
cash equivalents |
$ |
(1,997 |
) |
|
$ |
8,387 |
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesReconciliation of Net Cash Provided by
Operating Activities (GAAP) to Free Cash Flow
(non-GAAP)(in thousands)
|
For the year ended December 31, |
|
|
2018 |
|
|
|
2017 |
|
GAAP: Net cash provided
by operating activities |
$ |
41,664 |
|
|
$ |
55,799 |
|
Less: |
|
|
|
Purchases
of property, plant and equipment |
|
(20,584 |
) |
|
|
(19,314 |
) |
Purchases
of intangible assets |
|
(541 |
) |
|
|
(1,255 |
) |
Non-GAAP: Free cash
flow |
$ |
20,539 |
|
|
$ |
35,230 |
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (Loss) to Adjusted
EBITDA(in thousands)
|
For the three months ended December
31, |
|
For the year ended December
31, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
Net (loss)
income |
$ |
(1,065 |
) |
|
$ |
869 |
|
|
$ |
6,845 |
|
|
$ |
(2,168 |
) |
Less: net
(loss) income attributable to noncontrolling interests, net of
taxes |
|
(4 |
) |
|
|
(15 |
) |
|
|
9 |
|
|
|
7 |
|
Net (loss)
income attributable to Mistras Group, Inc. |
$ |
(1,061 |
) |
|
$ |
884 |
|
|
$ |
6,836 |
|
|
$ |
(2,175 |
) |
Interest expense |
|
2,370 |
|
|
|
1,273 |
|
|
|
7,950 |
|
|
|
4,386 |
|
Provision for income
taxes |
|
1,197 |
|
|
|
4,141 |
|
|
|
7,426 |
|
|
|
1,942 |
|
Depreciation and
amortization |
|
8,677 |
|
|
|
7,740 |
|
|
|
34,413 |
|
|
|
31,383 |
|
Share-based
compensation expense |
|
1,347 |
|
|
|
1,436 |
|
|
|
6,107 |
|
|
|
6,575 |
|
Litigation charges |
|
— |
|
|
|
400 |
|
|
|
— |
|
|
|
1,600 |
|
Impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,810 |
|
Pension withdrawal
expense |
|
— |
|
|
|
— |
|
|
|
5,886 |
|
|
|
— |
|
Gain on sale of
subsidiary |
|
— |
|
|
|
|
|
(2,384 |
) |
|
|
— |
|
Acquisition-related
expense, net |
|
1,675 |
|
|
|
1,071 |
|
|
|
532 |
|
|
|
482 |
|
Reorganization and
other costs |
|
585 |
|
|
|
871 |
|
|
|
4,758 |
|
|
|
1,941 |
|
Bad debt provision for
troubled customers |
|
650 |
|
|
|
— |
|
|
|
650 |
|
|
|
1,200 |
|
Foreign exchange (gain)
loss |
|
660 |
|
|
|
7 |
|
|
|
1,311 |
|
|
|
604 |
|
Adjusted EBITDA |
$ |
16,100 |
|
|
$ |
17,823 |
|
|
$ |
73,485 |
|
|
$ |
63,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (Loss) (GAAP) and Diluted EPS (GAAP)
to Net Income Excluding Special Items
(non-GAAP)and Diluted EPS Excluding Special Items
(non-GAAP)(in thousands, except per share
data)
|
Three months ended December 31, |
|
|
Year ended December 31, |
|
2018 (1) |
|
2017 (1) |
|
|
2018 (1) |
|
2017 (1) |
Net income (loss)
(GAAP) |
$ |
(1,061 |
) |
|
$ |
884 |
|
|
$ |
6,836 |
|
|
$ |
(2,175 |
) |
Impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,860 |
|
Reorganization and
other costs |
|
496 |
|
|
|
617 |
|
|
|
3,718 |
|
|
|
1,331 |
|
Bad debt provision for
troubled customers |
|
488 |
|
|
|
— |
|
|
|
488 |
|
|
|
908 |
|
Pension withdrawal
expense |
|
— |
|
|
|
— |
|
|
|
4,524 |
|
|
|
— |
|
Gain on sale of
subsidiary |
|
— |
|
|
|
— |
|
|
|
(1,833 |
) |
|
|
— |
|
Residual impact of tax
act |
|
115 |
|
|
|
1,565 |
|
|
|
1,732 |
|
|
|
(662 |
) |
Acquisition-related
expense, net |
|
1,624 |
|
|
|
874 |
|
|
|
674 |
|
|
|
251 |
|
Litigation charges |
|
— |
|
|
|
461 |
|
|
|
— |
|
|
|
1,211 |
|
Net income Excluding
Special Items (non-GAAP) |
|
1,662 |
|
|
|
4,401 |
|
|
$ |
16,139 |
|
|
$ |
12,724 |
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP) |
$ |
(0.04 |
) |
|
$ |
0.03 |
|
|
$ |
0.23 |
|
|
$ |
(0.08 |
) |
Impairment charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
Reorganization and
other costs |
|
0.02 |
|
|
|
0.02 |
|
|
|
0.13 |
|
|
|
0.04 |
|
Bad debt provision for
troubled customers |
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
0.03 |
|
Pension withdrawal
expense |
|
— |
|
|
|
— |
|
|
|
0.15 |
|
|
|
— |
|
Gain on sale of
subsidiary |
|
— |
|
|
|
— |
|
|
|
(0.06 |
) |
|
|
— |
|
Residual impact of tax
act |
|
— |
|
|
|
0.05 |
|
|
|
0.06 |
|
|
|
(0.02 |
) |
Acquisition-related
expense, net |
|
0.06 |
|
|
|
0.03 |
|
|
|
0.02 |
|
|
|
0.01 |
|
Litigation charges |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.04 |
|
Diluted EPS Excluding
Special Items (non-GAAP) |
$ |
0.06 |
|
|
$ |
0.15 |
|
|
$ |
0.55 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) - On December 22, 2017, the United States enacted
fundamental changes to federal tax law following passage of the Tax
Act (the “Tax Act”). Accordingly, during the three months and year
ended respective periods for December 31, 2018 and 2017, the
Company recorded a net charge as highlighted in the table above,
primarily attributable to three items; i) the transition tax ii)
the remeasurement of federal deferred tax assets and liabilities
from 35% to 21% and iii) amounts attributable to deferred tax
assets due to changes made to executive compensation rules pursuant
to the Tax Act. In reconciling net income and diluted
earnings per share to non-GAAP measures, the Company allocated all
the related tax effects inclusive of the Tax Act, as recorded
during the three months and year ended periods for December 31,
2017, to the specific special items. The remaining tax impact of
the Tax Act, as well as the 2018 adjustment, was reflected as a
residual impact, which is shown as a separate line in the non-GAAP
reconciliation table above.
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