MISTRAS Group, Inc. (MG: NYSE), a leading "one source" global
multinational provider of integrated technology-enabled asset
protection solutions, reported financial results for its third
quarter ended September 30, 2020.
Highlights of the Third Quarter 2020*
- Revenue of $147.9 million, a decrease of 23.0% year
over year, but an increase of 18.9% sequentially
- Gross profit margin of 32.0%, a 190 basis point
increase
- SG&A expenses of $37.1 million, a decrease of $5.2
million or 12.3%
- Net income of $1.6 million or $0.05 per
share
- Adjusted EBITDA of $17.4 million
- Operating cash flow of $6.9 million
Highlights for the Year-to-Date 2020*
- Revenue of $431.8 million, a decrease of
24.2%
- Gross profit margin of 29.9%, a 60 basis point
increase
- SG&A expense of $116.3 million, a reduction of $9.7
million or 7.7%
- Operating cash flow of $41.8 million, an increase of
3.2%
- Free cash flow of $30.8 million, an increase of
36.9%
- Debt repayment of $18.8 million
* All comparisons are consolidated and versus the
equivalent prior year period, unless otherwise noted.
For the third quarter of 2020, consolidated revenue was $147.9
million compared to $192.2 million in the prior year period, a
decrease of 23% year-over-year. Sequentially however, third
quarter revenue increased 18.9% over the second quarter of 2020
reflecting a modest rebound in end markets and continued share
gains. For the third quarter, consolidated gross profit
margin improved by 190 basis points to 32.0% from 30.1% in the same
quarter a year ago. Gross profit margin expansion continues
to reflect the impact of cost efficiency initiatives, productivity
enhancements, government wage subsidies and a favorable sales
mix. The Company generated $6.9 million and $3.6 million in
operating cash flows and free cash flows, respectively, for the
third quarter of 2020, compared to $19.4 million in operating cash
flows and $13.4 million in free cash flows, respectively, for the
same prior year period. The Company generated $1.6 million of
net income, or $0.05 per diluted share for the third quarter of
2020. Adjusted EBITDA was $17.4 million for the third quarter
of 2020, down from $22.4 million in the year ago quarter, but up
51.3% sequentially from $11.5 million in the second quarter of
2020.
Chief Executive Officer Dennis Bertolotti commented, "Our
flexible and resilient organization once again responded to rapidly
changing market conditions, capitalizing on a recovery in our end
markets with a significant sequential quarterly revenue growth of
nearly 19%. Conditions are beginning to improve in the energy
sector, through stabilization in Oil and Gas and strengthening in
the renewable sector, particularly wind energy. Our aerospace
business has experienced some stabilization in North America, aided
by our diversification efforts into defense and space, while the
European aerospace market continues to lag. Gross profit
margin in the third quarter 2020 continued the strong performance
trend from the second quarter 2020, as our ability to quickly adapt
to changes in both up and down markets has enabled us to improve
gross profit margin year over year. SG&A was down over
12% from the year ago quarter, the largest relative decrease in
quarterly overhead costs this year, as we continue to drive
efficiencies. We remained operating and free cash flow
positive in the third quarter, despite the investment in working
capital required from the rapid increase in revenue in the third
quarter. On a year-to-date basis, our free cash flow improved by
$8.3 million, a significant 37% improvement over the prior year
period. We have paid down $18.8 million of debt thus far in 2020,
and this remains our top priority for our residual free cash
flow. Our sequential improvement over the second quarter
reflects strong execution, modest improvement in our end markets as
well as growth in share of our target markets.”
Mr. Bertolotti additionally commented on the Company’s progress
with a number of growth initiatives and provided an outlook for the
balance of 2020, noting, “Our primary focus remains on evolving our
services to meet the needs of our customers in the various markets
we serve, so we remain an essential provider who enables our
customers to operate their facilities efficiently, safely and in
compliance with all regulatory requirements. As we expand our
offerings and use mobile applications to quickly offer real value
in data management of customer assets, new markets and
opportunities are emerging. Consequently, we continue to invest in
truly differentiated solutions to meet our customers’ unique
requirements. In the energy markets, we are expanding into
alternative energy, where the safety and integrity of wind
turbines, for instance, offers promising growth
opportunities. In aerospace, new opportunities are emerging
beyond our traditional commercial markets, including space and
defense, as owners continue to recognize our ability to provide
effective project management capabilities to the many steps of
their respective supply chains. Mistras Digital is another
focused area of growth, whether it be ruggedized tablets in the
field or greater use of Industrial IoT for remote monitoring and
predictive maintenance. Mistras is uniquely positioned to
capitalize on these new and emerging markets for which we have
already made the investment and maintain a comprehensive
capability. While volatility in today’s energy markets and
the pervasive impact of the global pandemic continue to create
headwinds and pose challenges in the near term, we are as confident
as ever that we are ideally positioned to capitalize on the growing
demand for services that can assure the safety, reliability and
regulatory compliance of various market’s constantly growing
infrastructure.”
Performance by segment during the quarter was as follows:
Services segment third quarter revenues were
$119.7 million, down 21.5% from a year ago, but up 18.9%
sequentially from the second quarter. Services segment
revenues continue to reflect the slowdown in the energy and
aerospace markets, primarily related to the COVID-19 pandemic. For
the third quarter, gross profit margin was 31.4%, up from 28.4% in
the third quarter of prior year. Gross profit margin
benefitted from better utilization, favorable sales mix and wage
subsidies in Canada.
International segment third quarter revenues
were $26.5 million, down 28.5% from a year ago, but up 24.1%
sequentially from the second quarter. Revenues primarily
reflect the softness in the European aerospace market.
International segment third quarter gross profit margin was 31.0%
down slightly from 31.6% in the year ago quarter.
The Company generated $41.8 million of cash flows from
operations in the first nine months of 2020, compared with $40.5
million in the year ago period. Free cash flow was $30.8
million in the first nine months of 2020, compared with $22.5
million in the comparable prior year period, an increase of 36.9%.
Free cash flow benefitted from a tightening of our capital
expenditure budget.
The Company’s net debt (total debt less cash and cash
equivalents) was $214.4 million at September 30, 2020, compared to
$239.7 million at December 31, 2019. Gross debt decreased by $18.2
million during the first nine months of 2020, from $254.7 million
at the end of the year to $236.5 million at September 30, 2020.
Outlook for remainder of 2020
It remains extremely difficult to forecast with any degree of
certainty at this time. The ongoing COVID-19 pandemic
continues to significantly impact the Company’s two largest
markets, Oil & Gas and Aerospace. The Oil & Gas
industry appears to be signaling a flattening for the fourth
quarter, and aerospace is also facing strong headwinds. As such, it
is likely that fourth quarter consolidated revenue will be
relatively flat to slightly down from the third quarter, adjusted
EBITDA will be lower than the third quarter, while operating and
free cash flow are expected to be higher than the third quarter.
This outlook is contingent on continuing macroeconomic stability,
including i) continuing stabilization in crude oil markets and ii)
no implementation of new or increased stay-in-place mandates
resulting from an increased spread of COVID-19, which could impact
our ability to work as a critical service provider.
Conference Call
In connection with this release, MISTRAS will hold a conference
call on November 5, 2020 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 2268064 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. - One Source for Asset
Protection Solutions®
MISTRAS Group, Inc. (NYSE: MG) is a leading "one source"
multinational provider of integrated technology-enabled asset
protection solutions, helping to maximize the safety and
operational uptime for civilization’s most critical industrial and
civil assets.
Backed by an innovative, data-driven asset protection portfolio,
proprietary technologies, and decades-long legacy of industry
leadership, MISTRAS leads clients in the oil and gas, aerospace and
defense, power generation, civil infrastructure, and manufacturing
industries towards achieving and maintaining operational
excellence. By supporting these organizations that help fuel our
vehicles and power our society; inspecting components that are
trusted for commercial, defense, and space craft; and building
real-time monitoring equipment to enable safe travel across
bridges, MISTRAS helps the world at large.
MISTRAS enhances value for its clients by integrating asset
protection throughout supply chains and centralizing integrity data
through a suite of Industrial IoT-connected digital software and
monitoring solutions. The company’s core capabilities also include
non-destructive testing (“NDT”) field inspections enhanced by
advanced robotics, laboratory quality control and assurance
testing, sensing technologies and NDT equipment, asset and
mechanical integrity engineering services, and light mechanical
maintenance and access services.
For more information about how MISTRAS helps protect
civilization’s critical infrastructure,
visit https://www.mistrasgroup.com/ or
contact Nestor S. Makarigakis, Group Vice President of Marketing at
marcom@mistrasgroup.com.
Forward-Looking and Cautionary
StatementsCertain 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 2019 Annual Report on Form 10-K dated
March 27, 2020, 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 MeasuresIn 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, non-cash impairment
charges and, if applicable, certain additional 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
"Net Income Excluding Special Items", 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, 2020 |
|
December 31, 2019 |
ASSETS |
|
(unaudited) |
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
22,116 |
|
|
$ |
15,016 |
|
Accounts receivable, net |
|
114,090 |
|
|
135,997 |
|
Inventories |
|
14,902 |
|
|
13,413 |
|
Prepaid expenses and other current assets |
|
16,699 |
|
|
14,729 |
|
Total current assets |
|
167,807 |
|
|
179,155 |
|
Property, plant and equipment,
net |
|
91,771 |
|
|
98,607 |
|
Intangible assets, net |
|
69,389 |
|
|
109,537 |
|
Goodwill |
|
201,623 |
|
|
282,410 |
|
Deferred income taxes |
|
1,811 |
|
|
1,786 |
|
Other assets |
|
48,374 |
|
|
48,383 |
|
Total assets |
|
$ |
580,775 |
|
|
$ |
719,878 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
|
$ |
12,588 |
|
|
$ |
15,033 |
|
Accrued expenses and other current liabilities |
|
78,415 |
|
|
81,389 |
|
Current portion of long-term debt |
|
9,889 |
|
|
6,593 |
|
Current portion of finance lease obligations |
|
3,651 |
|
|
4,131 |
|
Income taxes payable |
|
1,737 |
|
|
2,094 |
|
Total current liabilities |
|
106,280 |
|
|
109,240 |
|
Long-term debt, net of current
portion |
|
226,617 |
|
|
248,120 |
|
Obligations under finance
leases, net of current portion |
|
11,291 |
|
|
13,043 |
|
Deferred income taxes |
|
4,219 |
|
|
21,290 |
|
Other long-term
liabilities |
|
46,841 |
|
|
42,163 |
|
Total liabilities |
|
395,248 |
|
|
433,856 |
|
Commitments and
contingencies |
|
|
|
|
Equity |
|
|
|
|
Preferred stock, 10,000,000 shares authorized |
|
— |
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
29,191,876 and 28,945,472 shares issued and outstanding |
|
292 |
|
|
289 |
|
Additional paid-in capital |
|
233,267 |
|
|
229,205 |
|
Retained earnings (deficit) |
|
(22,029 |
) |
|
77,613 |
|
Accumulated other comprehensive loss |
|
(26,209 |
) |
|
(21,285 |
) |
Total Mistras Group, Inc. stockholders’ equity |
|
185,321 |
|
|
285,822 |
|
Noncontrolling interests |
|
206 |
|
|
200 |
|
Total equity |
|
185,527 |
|
|
286,022 |
|
Total liabilities and equity |
|
$ |
580,775 |
|
|
$ |
719,878 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Condensed Consolidated
Statements of Income (Loss)(in thousands, except per share
data)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Revenue |
$ |
147,894 |
|
|
$ |
192,192 |
|
|
$ |
431,794 |
|
|
$ |
569,595 |
|
Cost of revenue |
94,930 |
|
|
129,241 |
|
|
286,208 |
|
|
386,721 |
|
Depreciation |
5,580 |
|
|
5,182 |
|
|
16,400 |
|
|
16,160 |
|
Gross
profit |
47,384 |
|
|
57,769 |
|
|
129,186 |
|
|
166,714 |
|
Selling, general and administrative expenses |
37,113 |
|
|
42,328 |
|
|
116,278 |
|
|
126,014 |
|
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
— |
|
|
— |
|
|
2,798 |
|
Impairment charges |
— |
|
|
— |
|
|
106,062 |
|
|
— |
|
Pension withdrawal
expense |
— |
|
|
(45 |
) |
|
— |
|
|
489 |
|
Research and engineering |
638 |
|
|
650 |
|
|
2,170 |
|
|
2,261 |
|
Depreciation and amortization |
3,182 |
|
|
4,089 |
|
|
10,359 |
|
|
12,380 |
|
Acquisition-related expense
(benefit), net |
709 |
|
|
(32 |
) |
|
186 |
|
|
970 |
|
Income (loss) from
operations |
5,742 |
|
|
10,779 |
|
|
(105,869 |
) |
|
21,802 |
|
Interest expense |
3,645 |
|
|
2,959 |
|
|
9,410 |
|
|
10,065 |
|
Income (loss) before provision
(benefit) for income taxes |
2,097 |
|
|
7,820 |
|
|
(115,279 |
) |
|
11,737 |
|
Provision (benefit) for income taxes |
544 |
|
|
4,733 |
|
|
(15,645 |
) |
|
6,493 |
|
Net income (loss) |
1,553 |
|
|
3,087 |
|
|
(99,634 |
) |
|
5,244 |
|
Less: Net income (loss) attributable to non-controlling interests,
net of taxes |
30 |
|
|
(6 |
) |
|
8 |
|
|
13 |
|
Net income (loss) attributable
to Mistras Group, Inc. |
$ |
1,523 |
|
|
$ |
3,093 |
|
|
$ |
(99,642 |
) |
|
$ |
5,231 |
|
|
|
|
|
|
|
|
|
Earnings (loss) per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.05 |
|
|
$ |
0.11 |
|
|
$ |
(3.43 |
) |
|
$ |
0.18 |
|
Diluted |
$ |
0.05 |
|
|
$ |
0.11 |
|
|
$ |
(3.43 |
) |
|
$ |
0.18 |
|
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
29,177 |
|
|
28,800 |
|
|
29,086 |
|
|
28,678 |
|
Diluted |
29,311 |
|
|
29,156 |
|
|
29,086 |
|
|
29,022 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues |
|
|
|
|
|
|
|
Services |
$ |
119,721 |
|
|
$ |
152,572 |
|
|
$ |
349,271 |
|
|
$ |
454,079 |
|
International |
26,477 |
|
|
37,050 |
|
|
76,887 |
|
|
109,302 |
|
Products and Systems |
3,932 |
|
|
5,521 |
|
|
10,746 |
|
|
13,222 |
|
Corporate and eliminations |
(2,236 |
) |
|
(2,951 |
) |
|
(5,110 |
) |
|
(7,008 |
) |
|
$ |
147,894 |
|
|
$ |
192,192 |
|
|
$ |
431,794 |
|
|
$ |
569,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Gross
profit |
|
|
|
|
|
|
|
Services |
$ |
37,603 |
|
|
$ |
43,330 |
|
|
$ |
103,780 |
|
|
$ |
127,903 |
|
International |
8,197 |
|
|
11,695 |
|
|
21,612 |
|
|
33,113 |
|
Products and Systems |
1,628 |
|
|
2,739 |
|
|
3,834 |
|
|
5,803 |
|
Corporate and eliminations |
(44 |
) |
|
5 |
|
|
(40 |
) |
|
(105 |
) |
|
$ |
47,384 |
|
|
$ |
57,769 |
|
|
$ |
129,186 |
|
|
$ |
166,714 |
|
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 September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Services: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
13,599 |
|
|
|
$ |
15,757 |
|
|
|
$ |
(57,058 |
) |
|
|
$ |
40,715 |
|
|
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,778 |
|
|
Impairment charges |
— |
|
|
|
— |
|
|
|
86,200 |
|
|
|
— |
|
|
Pension withdrawal expense |
— |
|
|
|
(45 |
) |
|
|
— |
|
|
|
489 |
|
|
Reorganization and other costs |
58 |
|
|
|
125 |
|
|
|
125 |
|
|
|
202 |
|
|
Legal settlement |
(360 |
) |
|
|
— |
|
|
|
(360 |
) |
|
|
— |
|
|
Acquisition-related expense (benefit), net |
709 |
|
|
|
(125 |
) |
|
|
186 |
|
|
|
577 |
|
|
Income before special items (non-GAAP) |
$ |
14,006 |
|
|
|
$ |
15,712 |
|
|
|
$ |
29,093 |
|
|
|
$ |
44,761 |
|
|
International: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
(66 |
) |
|
|
$ |
2,921 |
|
|
|
$ |
(22,422 |
) |
|
|
$ |
5,155 |
|
|
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
|
— |
|
|
|
— |
|
|
|
20 |
|
|
Impairment charges |
— |
|
|
|
— |
|
|
|
19,862 |
|
|
|
— |
|
|
Reorganization and other costs |
21 |
|
|
|
90 |
|
|
|
313 |
|
|
|
355 |
|
|
Income (loss) before special items (non-GAAP) |
$ |
(45 |
) |
|
|
$ |
3,011 |
|
|
|
$ |
(2,247 |
) |
|
|
$ |
5,530 |
|
|
Products and
Systems: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
(160 |
) |
|
|
$ |
509 |
|
|
|
$ |
(1,936 |
) |
|
|
$ |
(1,224 |
) |
|
Reorganization and other costs |
5 |
|
|
|
218 |
|
|
|
5 |
|
|
|
218 |
|
|
Loss before special items (non-GAAP) |
$ |
(155 |
) |
|
|
$ |
727 |
|
|
|
$ |
(1,931 |
) |
|
|
$ |
(1,006 |
) |
|
Corporate and
Eliminations: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(7,631 |
) |
|
|
$ |
(8,408 |
) |
|
|
$ |
(24,453 |
) |
|
|
$ |
(22,844 |
) |
|
Loss on debt modification |
— |
|
|
|
— |
|
|
|
645 |
|
|
|
— |
|
|
Reorganization and other costs |
14 |
|
|
|
44 |
|
|
|
137 |
|
|
|
104 |
|
|
Acquisition-related expense, net |
— |
|
|
|
93 |
|
|
|
— |
|
|
|
393 |
|
|
Loss before special items (non-GAAP) |
$ |
(7,617 |
) |
|
|
$ |
(8,271 |
) |
|
|
$ |
(23,671 |
) |
|
|
$ |
(22,347 |
) |
|
Total
Company: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
5,742 |
|
|
|
$ |
10,779 |
|
|
|
$ |
(105,869 |
) |
|
|
$ |
21,802 |
|
|
Bad debt provision for troubled customers, net of recoveries |
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,798 |
|
|
Impairment charges |
— |
|
|
|
— |
|
|
|
106,062 |
|
|
|
— |
|
|
Pension withdrawal expense |
— |
|
|
|
(45 |
) |
|
|
— |
|
|
|
489 |
|
|
Reorganization and other costs |
98 |
|
|
|
477 |
|
|
|
580 |
|
|
|
879 |
|
|
Loss on debt modification |
— |
|
|
|
— |
|
|
|
645 |
|
|
|
— |
|
|
Legal settlement |
(360 |
) |
|
|
— |
|
|
|
(360 |
) |
|
|
— |
|
|
Acquisition-related expense (benefit), net |
709 |
|
|
|
(32 |
) |
|
|
186 |
|
|
|
970 |
|
|
Income (loss) before special items (non-GAAP) |
$ |
6,189 |
|
|
|
$ |
11,179 |
|
|
|
$ |
1,244 |
|
|
|
$ |
26,938 |
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Summary Cash Flow
Information(in thousands)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net cash provided by (used
in): |
|
|
|
|
|
|
|
Operating activities |
$ |
6,929 |
|
|
|
$ |
19,371 |
|
|
|
$ |
41,791 |
|
|
|
$ |
40,476 |
|
|
Investing activities |
(3,310 |
) |
|
|
(10,580 |
) |
|
|
(10,558 |
) |
|
|
(21,628 |
) |
|
Financing activities |
(4,740 |
) |
|
|
(6,382 |
) |
|
|
(25,077 |
) |
|
|
(29,521 |
) |
|
Effect of exchange rate changes on cash |
649 |
|
|
|
(538 |
) |
|
|
944 |
|
|
|
(499 |
) |
|
Net change in cash and cash
equivalents |
$ |
(472 |
) |
|
|
$ |
1,871 |
|
|
|
$ |
7,100 |
|
|
|
$ |
(11,172 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Cash Provided by Operating Activities (GAAP) to Free
Cash Flow (non-GAAP)(in thousands)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net cash provided by
operating activities (GAAP) |
$ |
6,929 |
|
|
|
$ |
19,371 |
|
|
|
$ |
41,791 |
|
|
|
$ |
40,476 |
|
|
Less: |
|
|
|
|
|
|
|
Purchases of property, plant
and equipment |
(3,233 |
) |
|
|
(5,713 |
) |
|
|
(10,676 |
) |
|
|
(17,275 |
) |
|
Purchases of intangible
assets |
(116 |
) |
|
|
(263 |
) |
|
|
(311 |
) |
|
|
(704 |
) |
|
Free cash flow
(non-GAAP) |
$ |
3,580 |
|
|
|
$ |
13,395 |
|
|
|
$ |
30,804 |
|
|
|
$ |
22,497 |
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA
(non-GAAP)(in thousands)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(GAAP) |
$ |
1,553 |
|
|
|
$ |
3,087 |
|
|
|
$ |
(99,634 |
) |
|
|
$ |
5,244 |
|
|
Less: Net income (loss) attributable to non-controlling interests,
net of taxes |
30 |
|
|
|
(6 |
) |
|
|
8 |
|
|
|
13 |
|
|
Net income (loss)
attributable to Mistras Group, Inc. |
$ |
1,523 |
|
|
|
$ |
3,093 |
|
|
|
$ |
(99,642 |
) |
|
|
$ |
5,231 |
|
|
Interest expense |
3,645 |
|
|
|
2,959 |
|
|
|
9,410 |
|
|
|
10,065 |
|
|
Provision (benefit) for income taxes |
544 |
|
|
|
4,733 |
|
|
|
(15,645 |
) |
|
|
6,493 |
|
|
Depreciation and amortization |
8,762 |
|
|
|
9,271 |
|
|
|
26,759 |
|
|
|
28,540 |
|
|
Share-based compensation expense |
1,572 |
|
|
|
1,725 |
|
|
|
4,312 |
|
|
|
4,592 |
|
|
Impairment charges |
— |
|
|
|
— |
|
|
|
106,062 |
|
|
|
— |
|
|
Acquisition-related expense (benefit), net |
709 |
|
|
|
(32 |
) |
|
|
186 |
|
|
|
970 |
|
|
Reorganization and other related costs |
98 |
|
|
|
477 |
|
|
|
580 |
|
|
|
879 |
|
|
Legal settlement |
(360 |
) |
|
|
— |
|
|
|
(360 |
) |
|
|
— |
|
|
Pension withdrawal expense |
— |
|
|
|
(45 |
) |
|
|
— |
|
|
|
489 |
|
|
Loss on debt modification |
— |
|
|
|
— |
|
|
|
645 |
|
|
|
— |
|
|
Bad debt provision (benefit) for troubled customers, net of
recoveries |
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,798 |
|
|
Foreign exchange (gain) loss |
898 |
|
|
|
197 |
|
|
|
1,965 |
|
|
|
(1,001 |
) |
|
Adjusted EBITDA
(non-GAAP) |
$ |
17,391 |
|
|
|
$ |
22,378 |
|
|
|
$ |
34,272 |
|
|
|
$ |
59,056 |
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (Loss) (GAAP) and Diluted EPS (GAAP)
to Net Income (Loss) Excluding Special Items (non-GAAP)
and Diluted EPS Excluding Special Items
(non-GAAP)(tabular dollars in thousands, except per share
data)
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income (loss)
attributable to Mistras Group, Inc. (GAAP) |
$ |
1,523 |
|
|
|
$ |
3,093 |
|
|
|
$ |
(99,642 |
) |
|
|
$ |
5,231 |
|
|
Special items |
447 |
|
|
|
400 |
|
|
|
107,113 |
|
|
|
5,136 |
|
|
Tax impact on special items(1) |
(192 |
) |
|
|
(100 |
) |
|
|
(14,233 |
) |
|
|
(1,307 |
) |
|
Special items, net of tax |
$ |
255 |
|
|
|
$ |
300 |
|
|
|
$ |
92,880 |
|
|
|
$ |
3,829 |
|
|
Net income (loss)
attributable to Mistras Group, Inc. Excluding Special Items
(non-GAAP) |
$ |
1,778 |
|
|
|
$ |
3,393 |
|
|
|
$ |
(6,762 |
) |
|
|
$ |
9,060 |
|
|
|
|
|
|
|
|
|
|
Diluted EPS
(GAAP)(2) |
$ |
0.05 |
|
|
|
$ |
0.11 |
|
|
|
$ |
(3.43 |
) |
|
|
$ |
0.18 |
|
|
Special items, net of tax |
0.01 |
|
|
|
0.01 |
|
|
|
3.19 |
|
|
|
0.13 |
|
|
Diluted EPS Excluding
Special Items (non-GAAP) |
$ |
0.06 |
|
|
|
$ |
0.12 |
|
|
|
$ |
(0.24 |
) |
|
|
$ |
0.31 |
|
|
_______________(1) The Company modified the prior year tax
effect on special items to be consistent with the current year
methodology, which was to apply the current jurisdictional tax rate
to each specific special item. The impact of this change on the
three months ended September 30, 2019 was a reduction of special
tax of approximately $(0.1) million and $(0.00) per diluted share
and on the nine months ended September 30, 2019 was approximately
($0.8) million and ($0.03) per diluted share.(2) For the nine
months ended September 30, 2020, 213 thousand shares related to
restricted stock were excluded from the calculation of diluted EPS
due to the net loss for the period.
Media Contact:
Nestor S. MakarigakisGroup Vice President of
Marketingmarcom@mistrasgroup.com1(609)716-4000
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