MISTRAS Group, Inc. (MG: NYSE), a leading "one source" global
provider of technology-enabled asset protection solutions, reported
financial results for its third quarter ended September 30, 2019.
For the third quarter of 2019, consolidated revenues were $192.2
million compared with $182.2 million in the prior year period, an
increase of 6%. For the quarter, consolidated gross profit
increased 10% compared with 2018 to $57.8 million, as the
consolidated gross margin improved by 140 basis points to 30.1%
from 28.7% in the same quarter a year ago. The Company
generated $19.4 million and $13.4 million in operating cash flows
and free cash flows, respectively, for the third quarter of 2019
compared to $4.1 million in operating cash flows and $(0.5) million
in free cash flows for the same quarter a year ago.
Chief Executive Officer Dennis Bertolotti stated, "Third quarter
results reflect continued progress positioning MISTRAS for long
term success. The increase in gross margins, disciplined
expense control, growth in our core market share and increase in
operating and free cash flow are all consistent with our strategy
to drive long-term value creation. Furthermore, this
quarter’s acquisition of New Century Software adds another
important component to our MISTRAS Digital strategy, which is
already making significant strides applying innovative technology
that improves our overall offerings and value proposition for
customers. These are the keys to building a strong foundation
to capitalize on the significant opportunities in our $14 billion
NDT industry, where the market continues to grow as a result of
increasing regulatory compliance requirements, rising health and
safety concerns, and the need to better protect the global
investment in physical assets.”
Mr. Bertolotti additionally commented on the Company’s current
outlook for 2019, saying, “The pervasive uncertainty surrounding
the global macroeconomic environment has now impacted our core Oil
and Gas market. Consequently, despite what we believe to be
steady gains in our core market share, the weakness in the Oil and
Gas turnaround market has reduced our expectations for the fourth
quarter and consequently full year revenues and adjusted
EBITDA. We believe this decline in market growth is
temporary, and we fully expect performance in our Oil and Gas
operations to show renewed strength next year. We believe that our
year-to-date 2019 gross margin can be maintained into 2020, even
with short-term volatility in revenue volume.”
“Over the long-term we are confident that our strategy will
enable us to outpace industry growth in both the near and long term
while expanding margins and generating attractive free cash
flow. The actions we have taken to dispose of non-core and
less profitable operations, improve operating efficiency, and
expand into adjacent markets such as mechanical services and
platforms such as MISTRAS Digital, both through organic investment
as well as strategic acquisitions, has positioned us to capitalize
on the emerging demand for faster access to better, and more
predictive information.”
Performance by segment during the quarter was as follows:
Services segment third quarter revenues
increased by 8%. This improvement in the top line was driven
by revenue from acquisitions coupled with organic growth.
Services segment gross profit margins improved 90 basis points in
the third quarter to 28.4% from 27.5% due to favorable operating
leverage, favorable service mix, and a decrease in the proportion
of low margin contracts.
International segment third quarter revenues
increased 1%, despite the headwinds created by the runoff of the
European staff leasing business and a mid-single digit decline in
foreign exchange rates. Segment gross margins improved by 190
basis points compared to the year ago quarter, reflecting
steady progress improving labor utilization rates and the reduction
of low margin contracts.
Products and Systems segment revenue decreased
by 3% in the third quarter of 2019 compared to the prior
year. The revenue decline was attributable to the segment’s
2018 subsidiary sale, partially offset by new contracts recently
procured. Gross profit margin improved by 400 basis points compared
to the year ago quarter due to product sales mix.
The Company generated $40.5 million of cash flows from operating
activities and $22.5 million of free cash flow in the first nine
months of 2019, up strongly from $24.2 million and $8.4 million,
increases of 67% and 168%, respectively, in the same prior year
period.
The Company’s net debt (total debt less cash and cash
equivalents) was $252.9 million at September 30, 2019, down from
$265.1 million at December 31, 2018. The Company’s gross debt has
decreased by $23.3 million during 2019, to $267.3 million at
September 30, 2019 from $290.6 million at December 31, 2018 due to
repayments made by the Company. The Company additionally paid a
total of $7.7 million for acquisitions and taxes related to net
settlement of share-based awards, during the nine months ended
September 30, 2019.
Updated Guidance for 2019
Revenues and operating earnings were ahead of fiscal 2018 on a
year to date basis through the first nine months, indicating a
robust business. However, the strong momentum developed over
the past two quarters encountered some headwinds coming into the
fourth quarter of 2019. The Company is seeing a weak Oil and
Gas market, and an overall Fall season that ended much sooner than
anticipated. In particular, the Company sees weaknesses in
the Oil and Gas turnaround market that appears to be attributable
to supply buildups earlier in the year, as well as refineries
shifting resources to prepare for IMO2020. In addition,
towards the middle of September 2019 and into October 2019, a note
of caution unexpectedly arose amongst Oil and Gas customers,
attributable primarily to increased macroeconomic
uncertainty. It is the same note of caution that is being
heard in various sectors, stemming from many factors, including
trade tensions, negative European interest rates, and the slowdown
in domestic GDP growth. Although the long-term outlook
remains intact, these factors are clearly influencing current
activity in the Oil and Gas market, resulting in pushouts of
demand.
Although the Company feels very good about where it is and its
outlook for the long term, this unexpected pause in the Oil and Gas
end markets has created some immediate challenges, which will
affect performance for the fourth quarter of 2019 and full year
2019.
Consequently, the Company’s full year outlook is now
significantly more modest than originally anticipated, and
accordingly the Company is lowering its guidance for 2019 as
follows:
Total revenues are expected to be between
$740 million to $750 million; Adjusted
EBITDA is expected to be between $70 million and $75 million;
Capital expenditures are expected to be under
$25 million; and Free cash flow is
expected to between $28 million to $32 million.
The Company is still developing its 2020 full year budget, but
preliminarily anticipates modest single digit top-line growth,
while maintaining its year-to-date 2019 gross profit and operating
margins and cashflow levels.
Conference Call
In connection with this release, MISTRAS will hold a conference
call on November 5, 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 7277122 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 and aerospace components.
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; mechanical integrity ("MI") and non-destructive
testing ("NDT") services; destructive testing services; and its
proprietary world class data warehousing and analysis software and
online monitoring - 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 2018 Annual Report on Form 10-K dated March 15,
2019, 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.
Mistras Group, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
|
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
|
(unaudited) |
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
14,372 |
|
|
$ |
25,544 |
|
Accounts receivable, net |
|
148,024 |
|
|
148,324 |
|
Inventories |
|
13,419 |
|
|
13,053 |
|
Prepaid expenses and other current assets |
|
17,135 |
|
|
15,870 |
|
Total current assets |
|
192,950 |
|
|
202,791 |
|
Property, plant and equipment,
net |
|
95,502 |
|
|
93,895 |
|
Intangible assets, net |
|
106,893 |
|
|
111,395 |
|
Goodwill |
|
283,121 |
|
|
279,259 |
|
Deferred income taxes |
|
2,780 |
|
|
1,930 |
|
Other assets |
|
46,781 |
|
|
4,767 |
|
Total assets |
|
$ |
728,027 |
|
|
$ |
694,037 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
|
$ |
13,428 |
|
|
$ |
13,863 |
|
Accrued expenses and other current liabilities |
|
86,452 |
|
|
73,895 |
|
Current portion of long-term debt |
|
6,563 |
|
|
6,833 |
|
Current portion of finance lease obligations |
|
3,751 |
|
|
3,922 |
|
Income taxes payable |
|
1,049 |
|
|
1,958 |
|
Total current liabilities |
|
111,243 |
|
|
100,471 |
|
Long-term debt, net of current
portion |
|
260,753 |
|
|
283,787 |
|
Obligations under finance
leases, net of current portion |
|
10,799 |
|
|
9,075 |
|
Deferred income taxes |
|
27,458 |
|
|
23,148 |
|
Other long-term
liabilities |
|
39,428 |
|
|
6,482 |
|
Total liabilities |
|
449,681 |
|
|
422,963 |
|
Commitments and
contingencies |
|
|
|
|
Equity |
|
|
|
|
Preferred stock, 10,000,000 shares authorized |
|
— |
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
28,915,088 and 28,562,608 shares issued |
|
289 |
|
|
285 |
|
Additional paid-in capital |
|
228,287 |
|
|
226,616 |
|
Retained earnings |
|
76,784 |
|
|
71,553 |
|
Accumulated other comprehensive loss |
|
(27,202 |
) |
|
(27,557 |
) |
Total Mistras Group, Inc. stockholders’ equity |
|
278,158 |
|
|
270,897 |
|
Non-controlling interests |
|
188 |
|
|
177 |
|
Total equity |
|
278,346 |
|
|
271,074 |
|
Total liabilities and equity |
|
$ |
728,027 |
|
|
$ |
694,037 |
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Condensed Consolidated
Statements of Income (Loss)(in thousands, except per share
data)
|
Three months ended |
|
Nine months ended |
|
September 30,2019 |
|
September 30,2018 |
|
September 30,2019 |
|
September 30,2018 |
Revenue |
$ |
192,192 |
|
|
$ |
182,169 |
|
|
$ |
569,595 |
|
|
$ |
561,592 |
|
Cost of revenue |
129,241 |
|
|
124,260 |
|
|
386,721 |
|
|
389,131 |
|
Depreciation |
5,182 |
|
|
5,577 |
|
|
16,160 |
|
|
16,902 |
|
Gross
profit |
57,769 |
|
|
52,332 |
|
|
166,714 |
|
|
155,559 |
|
Selling, general and administrative expenses |
42,328 |
|
|
41,931 |
|
|
126,014 |
|
|
122,232 |
|
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
— |
|
|
2,798 |
|
|
— |
|
Pension withdrawal expense (benefit) |
(45 |
) |
|
5,886 |
|
|
489 |
|
|
5,886 |
|
Gain on sale of subsidiary |
— |
|
|
(2,384 |
) |
|
— |
|
|
(2,384 |
) |
Research and engineering |
650 |
|
|
745 |
|
|
2,261 |
|
|
2,414 |
|
Depreciation and amortization |
4,089 |
|
|
2,920 |
|
|
12,380 |
|
|
8,834 |
|
Acquisition-related expense (benefit), net |
(32 |
) |
|
217 |
|
|
970 |
|
|
(1,143 |
) |
Income from
operations |
10,779 |
|
|
3,017 |
|
|
21,802 |
|
|
19,720 |
|
Interest expense |
2,959 |
|
|
1,894 |
|
|
10,065 |
|
|
5,581 |
|
Income before
provision for income taxes |
7,820 |
|
|
1,123 |
|
|
11,737 |
|
|
14,139 |
|
Provision for income taxes |
4,733 |
|
|
2,133 |
|
|
6,493 |
|
|
6,229 |
|
Net income
(loss) |
3,087 |
|
|
(1,010 |
) |
|
5,244 |
|
|
7,910 |
|
Less: Net income (loss) attributable to non-controlling interests,
net of taxes |
(6 |
) |
|
1 |
|
|
13 |
|
|
13 |
|
Net income (loss)
attributable to Mistras Group, Inc. |
$ |
3,093 |
|
|
$ |
(1,011 |
) |
|
$ |
5,231 |
|
|
$ |
7,897 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.11 |
|
|
$ |
(0.04 |
) |
|
$ |
0.18 |
|
|
$ |
0.28 |
|
Diluted |
$ |
0.11 |
|
|
$ |
(0.04 |
) |
|
$ |
0.18 |
|
|
$ |
0.27 |
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
28,800 |
|
|
28,429 |
|
|
28,678 |
|
|
28,360 |
|
Diluted |
29,156 |
|
|
28,429 |
|
|
29,022 |
|
|
29,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
Three months ended |
|
Nine months ended |
|
September 30,2019 |
|
September 30,2018 |
|
September 30,2019 |
|
September 30,2018 |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services |
$ |
152,572 |
|
|
$ |
141,340 |
|
|
$ |
454,079 |
|
|
$ |
434,653 |
|
International |
37,050 |
|
|
36,671 |
|
|
109,302 |
|
|
116,238 |
|
Products and Systems |
5,521 |
|
|
5,716 |
|
|
13,222 |
|
|
17,286 |
|
Corporate and eliminations |
(2,951 |
) |
|
(1,558 |
) |
|
(7,008 |
) |
|
(6,585 |
) |
|
$ |
192,192 |
|
|
$ |
182,169 |
|
|
$ |
569,595 |
|
|
$ |
561,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
September 30, 2019 |
|
September 30, 2018 |
|
September 30, 2019 |
|
September 30, 2018 |
Gross
profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services |
$ |
43,330 |
|
|
$ |
38,838 |
|
|
$ |
127,903 |
|
|
$ |
113,675 |
|
International |
11,695 |
|
|
10,877 |
|
|
33,113 |
|
|
34,273 |
|
Products and Systems |
2,739 |
|
|
2,604 |
|
|
5,803 |
|
|
7,707 |
|
Corporate and eliminations |
5 |
|
|
13 |
|
|
(105 |
) |
|
(96 |
) |
|
$ |
57,769 |
|
|
$ |
52,332 |
|
|
$ |
166,714 |
|
|
$ |
155,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofSegment and Total Company Income from Operations
(GAAP) to Income before Special Items (non-GAAP)(in
thousands)
|
Three months ended |
|
Nine months ended |
|
September 30,2019 |
|
September 30,2018 |
|
September 30,2019 |
|
September 30,2018 |
Services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
15,757 |
|
|
$ |
8,289 |
|
|
$ |
40,715 |
|
|
$ |
36,892 |
|
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
— |
|
|
2,778 |
|
|
— |
|
Pension withdrawal expense (benefit) |
(45 |
) |
|
5,886 |
|
|
489 |
|
|
5,886 |
|
Reorganization and other costs |
125 |
|
|
292 |
|
|
202 |
|
|
292 |
|
Acquisition-related expense (benefit), net |
(125 |
) |
|
181 |
|
|
577 |
|
|
(809 |
) |
Income before special items (non-GAAP) |
$ |
15,712 |
|
|
$ |
14,648 |
|
|
$ |
44,761 |
|
|
$ |
42,261 |
|
International: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
2,921 |
|
|
$ |
(662 |
) |
|
$ |
5,155 |
|
|
$ |
2,713 |
|
Reorganization and other costs |
90 |
|
|
2,808 |
|
|
355 |
|
|
3,544 |
|
Acquisition-related expense (benefit), net |
— |
|
|
— |
|
|
— |
|
|
(409 |
) |
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
— |
|
|
20 |
|
|
— |
|
Income before special items (non-GAAP) |
$ |
3,011 |
|
|
$ |
2,146 |
|
|
$ |
5,530 |
|
|
$ |
5,848 |
|
Products and
Systems: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
509 |
|
|
$ |
2,415 |
|
|
$ |
(1,224 |
) |
|
$ |
2,032 |
|
Gain on sale of subsidiary |
— |
|
|
(2,384 |
) |
|
— |
|
|
(2,384 |
) |
Reorganization and other costs |
218 |
|
|
— |
|
|
218 |
|
|
29 |
|
Income (loss) before special items (non-GAAP) |
$ |
727 |
|
|
$ |
31 |
|
|
$ |
(1,006 |
) |
|
$ |
(323 |
) |
Corporate and
Eliminations: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(8,408 |
) |
|
$ |
(7,025 |
) |
|
$ |
(22,844 |
) |
|
$ |
(21,917 |
) |
Reorganization and other costs |
44 |
|
|
305 |
|
|
104 |
|
|
305 |
|
Acquisition-related expense, net |
93 |
|
|
36 |
|
|
393 |
|
|
75 |
|
Loss before special items (non-GAAP) |
$ |
(8,271 |
) |
|
$ |
(6,684 |
) |
|
$ |
(22,347 |
) |
|
$ |
(21,537 |
) |
Total
Company: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
10,779 |
|
|
$ |
3,017 |
|
|
$ |
21,802 |
|
|
$ |
19,720 |
|
Pension withdrawal expense |
(45 |
) |
|
5,886 |
|
|
489 |
|
|
5,886 |
|
Gain on sale of subsidiary |
— |
|
|
(2,384 |
) |
|
— |
|
|
(2,384 |
) |
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
— |
|
|
2,798 |
|
|
— |
|
Reorganization and other costs |
477 |
|
|
3,405 |
|
|
879 |
|
|
4,170 |
|
Acquisition-related expense (benefit), net |
(32 |
) |
|
217 |
|
|
970 |
|
|
(1,143 |
) |
Income before special items (non-GAAP) |
$ |
11,179 |
|
|
$ |
10,141 |
|
|
$ |
26,938 |
|
|
$ |
26,249 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Summary Cash Flow
Information(in thousands)
|
Nine months ended |
|
September 30, 2019 |
|
September 30, 2018 |
Net cash provided by (used in): |
|
|
|
|
|
|
|
Operating activities |
$ |
40,476 |
|
|
$ |
24,184 |
|
Investing activities |
(21,628 |
) |
|
(9,831 |
) |
Financing activities |
(29,521 |
) |
|
(23,905 |
) |
Effect of exchange rate
changes on cash |
(499 |
) |
|
(916 |
) |
Net change in cash and cash
equivalents |
$ |
(11,172 |
) |
|
$ |
(10,468 |
) |
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Cash Provided by Operating Activities (GAAP)
to Free Cash Flow (non-GAAP)(in thousands)
|
Nine months ended |
|
September 30, 2019 |
|
September 30, 2018 |
Net cash provided by operating
activities (GAAP) |
$ |
40,476 |
|
|
$ |
24,184 |
|
Less: |
|
|
|
|
|
|
|
Purchases of property,
plant and equipment |
(17,275 |
) |
|
(15,386 |
) |
Purchases of intangible
assets |
(704 |
) |
|
(385 |
) |
Free cash flow (non-GAAP) |
$ |
22,497 |
|
|
$ |
8,413 |
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (Loss) (GAAP) to Adjusted EBITDA
(non-GAAP)(in thousands)
|
Three months ended |
|
Nine months ended |
|
September 30,2019 |
|
September 30,2018 |
|
September 30,2019 |
|
September 30,2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP) |
$ |
3,087 |
|
|
$ |
(1,010 |
) |
|
$ |
5,244 |
|
|
$ |
7,910 |
|
Less: Net income (loss) attributable to non-controlling interests,
net of taxes |
(6 |
) |
|
1 |
|
|
13 |
|
|
13 |
|
Net income (loss)
attributable to Mistras Group, Inc. |
$ |
3,093 |
|
|
$ |
(1,011 |
) |
|
$ |
5,231 |
|
|
$ |
7,897 |
|
Interest expense |
2,959 |
|
|
1,894 |
|
|
10,065 |
|
|
5,581 |
|
Provision for income
taxes |
4,733 |
|
|
2,133 |
|
|
6,493 |
|
|
6,229 |
|
Depreciation and
amortization |
9,271 |
|
|
8,497 |
|
|
28,540 |
|
|
25,736 |
|
Share-based compensation
expense |
1,725 |
|
|
1,931 |
|
|
4,592 |
|
|
4,760 |
|
Acquisition-related expense
(benefit), net |
(32 |
) |
|
217 |
|
|
970 |
|
|
(1,143 |
) |
Reorganization and other
related costs |
477 |
|
|
3,405 |
|
|
879 |
|
|
4,170 |
|
Gain on sale of
subsidiary |
— |
|
|
(2,384 |
) |
|
— |
|
|
(2,384 |
) |
Pension withdrawal expense
(benefit) |
(45 |
) |
|
5,886 |
|
|
489 |
|
|
5,886 |
|
Bad debt provision for
troubled customers, net of recoveries |
— |
|
|
— |
|
|
2,798 |
|
|
— |
|
Foreign exchange (gain)
loss |
197 |
|
|
262 |
|
|
(1,001 |
) |
|
651 |
|
Adjusted EBITDA
(non-GAAP) |
$ |
22,378 |
|
|
$ |
20,830 |
|
|
$ |
59,056 |
|
|
$ |
57,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income Attributable to Mistras Group, Inc.
(GAAP) toNet Income Attributable to Mistras Group,
Inc. Excluding Special Items (non-GAAP),
andDiluted EPS (GAAP) to Diluted EPS Excluding
Special Items (non-GAAP)(in thousands, except per share
data)
|
Three months ended |
|
Nine months ended |
|
9/30/2019 |
|
9/30/2018 |
|
9/30/2019 |
|
9/30/2018 |
Net income (loss) attributable to Mistras Group, Inc.
(GAAP) |
$ |
3,093 |
|
|
$ |
(1,011 |
) |
|
$ |
5,231 |
|
|
$ |
7,897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items |
400 |
|
|
7,124 |
|
|
5,136 |
|
|
6,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact on special items
(2) (3) |
(173 |
) |
|
(5,041 |
) |
|
(2,095 |
) |
|
(2,108 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Special items, net of tax |
227 |
|
|
2,083 |
|
|
3,041 |
|
|
4,421 |
|
Net income attributable to
Mistras Group, Inc. Excluding Special Items (non-GAAP) (4) |
$ |
3,320 |
|
|
$ |
1,072 |
|
|
$ |
8,272 |
|
|
$ |
12,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP)(1) |
$ |
0.11 |
|
|
$ |
(0.04 |
) |
|
$ |
0.18 |
|
|
$ |
0.27 |
|
Special items, net of tax |
0.01 |
|
|
0.07 |
|
|
0.10 |
|
|
0.15 |
|
Diluted EPS Excluding Special
Items (non-GAAP) (4) |
$ |
0.12 |
|
|
$ |
0.03 |
|
|
$ |
0.28 |
|
|
$ |
0.42 |
|
(1) For the three months ended September 30, 2018, 805 and 364
shares related to stock options and restricted stock, respectively,
were excluded from the calculation of diluted EPS due to the net
loss for the period.
(2) The Company's tax effect on special items was calculated
utilizing the Company's effective tax rate, exclusive of discrete
items, for the three and nine months ended September 30, 2019,
which was 43% and 41%, respectively.
(3) The Company modified the prior year tax effect on special
items to be consistent with the current year methodology. The
effective tax rate for the three and nine months ended September
30, 2019, exclusive of discrete items, was 71% and 32%,
respectively. The impact of this change on the three months ended
September 30, 2018 was approximately $3.3 million and $0.12 per
diluted share and on the nine months ended September 30, 2018 was
$0.5 million and $0.02 per diluted share.
(4) The table above does not reflect a reduction in net income
related to the write-off of certain deferred tax assets of
approximately $1.4 million or $0.05 per diluted share for the three
and nine months ended September 30, 2019.
Media Contact:Nestor S. MakarigakisGroup Director of Marketing
Communicationsmarcom@mistrasgroup.com1(609)716-4000
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