MISTRAS Group, Inc. (MG: NYSE), a leading "one source"
multinational provider of integrated technology-enabled asset
protection solutions, reported financial results for its third
quarter and nine months ended September 30, 2022.
Highlights of the Third Quarter 2022*
- Revenue of $178.5 million, up 2.2%, a 5.1% increase
excluding the impact of unfavorable foreign currency
exchange**
- Gross profit of $53.8 million, with gross profit margin
of 30.1%, a 20 basis points increase
- Income from operations of $9.1 million, essentially
flat with prior year
- Net income of $4.4 million or $0.14 per diluted share,
up 29.4% and 27.3%, respectively
- Adjusted EBITDA of $18.6 million, essentially flat with
prior year
Highlights of the Year-to-Date 2022
- Revenue of $519.2 million, up 2.6%, a 4.8% increase
excluding the impact of unfavorable foreign currency
exchange**
- Gross profit of $147.2 million, essentially flat with
prior year
- Interest expense of $6.8 million, a decrease of
21.9%
- Gross debt of $201.2 million and Net debt of $183.1
million
* All comparisons are consolidated and versus
the equivalent prior year period, unless otherwise noted.** Foreign
currency exchange impact is calculated by converting current period
financial results in local currency, using the prior period
exchange rates, and comparing this amount to the current period
financial results in local currency using the current period
exchange rate.
For the third quarter of 2022, consolidated revenue was $178.5
million, a 2.2% increase, but up 5.1% excluding the impact of
unfavorable foreign currency exchange. Revenue growth was driven by
a 5.4% increase in Services’ Segment revenue, which benefitted from
the timing of energy-related projects and a continued rebound in
the Aerospace and Defense industry. As a result, the
Services’ Segment achieved its highest ever third quarter revenue,
exceeding the previous high in the third quarter of 2019.
Third quarter 2022 consolidated gross profit increased $1.6
million compared to the prior year period, with a gross profit
margin increase of 20 basis points. The improvement in gross margin
was primarily due to a favorable sales mix, driven by strength in
the Aerospace & Defense market.
Selling, general and administrative expenses in the third
quarter of 2022 were $41.6 million, up from $39.2 million in the
third quarter of 2021, primarily due to certain incremental costs
incurred related to the Company’s debt refinancing, in addition to
the reversal of remaining COVID-19 temporary cost reductions in
August of 2021, which were initially implemented in 2020.
Nevertheless, selling, general and administrative expenses remain
below the pre-pandemic level of the third quarter 2019.
For the third quarter of 2022, the Company reported net income
of $4.4 million or $0.14 per diluted share.
Chief Executive Officer Dennis Bertolotti commented, “This was
our ninth consecutive quarter of revenue growth, led by a record
Services’ segment third quarter and a 27% increase in our
consolidated Aerospace & Defense revenue, both of which were
the highest level since the onset of the pandemic. While our
customer pricing has yet to catch up with our inflationary cost
increases, we managed to nevertheless expand gross margin from a
year ago. The strong US dollar continues to have an adverse effect
on our international results, impacting both revenue and
profitability, which would have otherwise significantly improved
from a year ago assuming constant exchange rates.
Mr. Bertolotti continued, “Onstream, our inline inspection
business within the midstream sector, reported its’ second
consecutive, all-time high quarter. We expect growth in this
business to continue through the remainder of 2022 and into 2023,
due to increased production levels and the corresponding
transportation and distribution activity, due to high crude oil
prices.”
Mr. Bertolotti concluded, “Although inflation remains an
immediate challenge, we are continuing to make progress as we
actively engage with our customers, although the subsequent pricing
adjustments continues to lag the current pay rate increases. Our
continuing and intensifying focus on improving our overhead cost
profile, coupled with ongoing recovery in our end markets,
positions us to improve profitability heading into 2023. Our
recently announced new credit facility allows us the flexibility to
increase our investment in organic and inorganic growth
initiatives. Mistras has made significant progress in strengthening
our base and adapting to changes in our dynamic and expanding
market. Our strategy is to capitalize on our strong
brand name and unparalleled experience in our legacy markets while
investing in new and evolving markets to accelerate growth. We are
proud to have responsibly managed our business through some of the
most historically turbulent times over the past several years, that
our largest markets have ever seen. We will continue to implement
and expand the necessary measures, including further calibration of
our overhead costs.”
Performance by certain Segments:
Services segment third quarter revenue was
$152.8 million, up 5.4% from $145.0 million in the prior year
quarter. Revenue continues to reflect recovery in the Oil & Gas
and Aerospace & Defense markets. For the third quarter, gross
profit was $44.9 million, compared to $41.7 million in the prior
year. Gross profit margin was 29.4% for the third quarter of 2022,
compared to 28.8% in the third quarter of 2021. This increase of 60
basis points was due primarily to favorable sales mix, partially
offset by a prior year benefit associated with Canadian wage
subsidies that were available during the COVID-19 pandemic and are
no longer being provided.
International segment third quarter revenues
were $25.7 million, down 11.7% from $29.1 million in the prior year
quarter but up 2.3% in local currencies, which represents organic
growth, primarily due to increased opportunities in a recovering
Aerospace & Defense market. International segment third quarter
gross profit margin was 29.9%, compared to 31.1% in the prior year,
a 120-basis point decrease attributable to inflationary impacts
prevalent in the European region, partially offset by favorable
sales mix and price increases in response to these inflationary
impacts.
Cash Flow and Balance Sheet The Company’s net
cash from operating activities was $10.5 million for the first nine
months of 2022, compared to $22.5 million in the prior year. Free
cash flow was $0.9 million for the first nine months of 2022,
compared to $6.5 million in the prior year. For the third quarter
of 2022, free cash flow was $0.2 million, compared to ($0.9)
million in the prior year period. Operating cash flow in the third
quarter of 2022 was adversely affected by a significant build up in
working capital, primarily attributable to September 2022 being the
highest billing month of the year.
The Company’s net debt (total debt less cash and cash
equivalents) was $183.1 million as of September 30, 2022, compared
to $178.5 million as of December 31, 2021. Gross debt increased by
$0.8 million during the quarter ended September 30, 2022, from
$200.4 million as of June 30, 2022, to $201.2 million as of
September 30, 2022.
Outlook Updating to reflect current market
conditions, the Company is adjusting its previously announced
outlook for the full year 2022 and now anticipates revenue between
$683 and $693 million, Adjusted EBITDA between $53 and $58 million
and free cash flow between $15 and $18 million. Note that
unfavorable foreign currency exchange** is expected to lower
revenue and Adjusted EBITDA (after translation into U.S. Dollars),
by approximately $15 million and $2 million, respectively, on a
full year basis for 2022, compared to the original outlook for the
year. The Company expects both operating and free cash flow to
improve in the fourth quarter of 2022, not only from continued
positive operating results, but also due to an anticipated decrease
in working capital from September 30, 2022.
Conference Call In connection with this release
MISTRAS will hold a conference call on November 3, 2022, at 9:00
a.m. (Eastern). To listen to the live webcast of the conference
call, visit the Investor Relations section of MISTRAS Group’s
website at www.mistrasgroup.com.
Note there is a new process to participate in the live question
and answer session. Individuals wishing to participate may
preregister at:
https://register.vevent.com/register/BIe041ca5bd840444586f978d13b652b7d.
Upon registering, a dial-in number and unique PIN will be provided
to join the conference call.
Following the conference call, an archived webcast of the call
will be available for one year by visiting the Investor Relations
section of MISTRAS Group’s 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, strong
commitment to Environmental, Social, and Governance (ESG)
initiatives, and a decades-long legacy of industry leadership,
MISTRAS leads clients in the oil and gas, aerospace and defense,
renewable and nonrenewable power, civil infrastructure, and
manufacturing industries towards achieving operational and
environmental 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; building
real-time monitoring equipment to enable safe travel across
bridges; and helping to propel sustainability, 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
field and in-line 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
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 2021 Annual Report on Form 10-K dated
March 14, 2022, 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. The Company also used 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 and 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). A reconciliation of these non-GAAP financial measurement
to the most comparable GAAP financial measurement are also set
forth in tables attached to this press release. In the tables
attached is also a table reconciling “Segment and Total Company
Income (Loss) from operations (GAAP) to Income before special items
(non-GAAP), “Net Income (GAAP)" to "Net Income Excluding Special
Items (non-GAAP)”, and “Diluted EPS (GAAP)” to “Diluted EPS
Excluding Special Items (non-GAAP)” which reconciles the non-GAAP
financial measurement to a GAAP financial measurement.
Mistras Group, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
|
September 30, 2022 |
|
December 31, 2021 |
ASSETS |
|
(unaudited) |
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
18,084 |
|
|
$ |
24,110 |
|
Accounts receivable, net |
|
|
131,396 |
|
|
|
109,511 |
|
Inventories |
|
|
13,260 |
|
|
|
12,686 |
|
Prepaid expenses and other current assets |
|
|
11,693 |
|
|
|
15,031 |
|
Total current assets |
|
|
174,433 |
|
|
|
161,338 |
|
Property, plant and equipment,
net |
|
|
76,133 |
|
|
|
86,578 |
|
Intangible assets, net |
|
|
50,337 |
|
|
|
59,381 |
|
Goodwill |
|
|
197,433 |
|
|
|
205,439 |
|
Deferred income taxes |
|
|
589 |
|
|
|
2,174 |
|
Other assets |
|
|
41,521 |
|
|
|
47,285 |
|
Total assets |
|
$ |
540,446 |
|
|
$ |
562,195 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
|
$ |
12,805 |
|
|
$ |
12,870 |
|
Accrued expenses and other current liabilities |
|
|
83,070 |
|
|
|
83,863 |
|
Current portion of long-term debt |
|
|
7,365 |
|
|
|
20,162 |
|
Current portion of finance lease obligations |
|
|
3,967 |
|
|
|
3,765 |
|
Income taxes payable |
|
|
305 |
|
|
|
755 |
|
Total current liabilities |
|
|
107,512 |
|
|
|
121,415 |
|
Long-term debt, net of current
portion |
|
|
193,847 |
|
|
|
182,403 |
|
Obligations under finance
leases, net of current portion |
|
|
9,380 |
|
|
|
9,752 |
|
Deferred income taxes |
|
|
8,786 |
|
|
|
8,385 |
|
Other long-term
liabilities |
|
|
33,865 |
|
|
|
39,328 |
|
Total liabilities |
|
|
353,390 |
|
|
|
361,283 |
|
Equity |
|
|
|
|
Preferred stock, 10,000,000 shares authorized |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
29,842,496 and 29,546,263 shares issued and outstanding |
|
|
297 |
|
|
|
295 |
|
Additional paid-in capital |
|
|
242,093 |
|
|
|
238,687 |
|
Accumulated deficit |
|
|
(14,335 |
) |
|
|
(17,988 |
) |
Accumulated other comprehensive loss |
|
|
(41,282 |
) |
|
|
(20,311 |
) |
Total Mistras Group, Inc. stockholders’ equity |
|
|
186,773 |
|
|
|
200,683 |
|
Non-controlling interests |
|
|
283 |
|
|
|
229 |
|
Total equity |
|
|
187,056 |
|
|
|
200,912 |
|
Total liabilities and equity |
|
$ |
540,446 |
|
|
$ |
562,195 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Condensed Consolidated
Statements of Income(in thousands, except per share
data)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
Revenue |
$ |
178,462 |
|
$ |
174,556 |
|
$ |
519,155 |
|
|
$ |
505,968 |
Cost of revenue |
|
119,110 |
|
|
116,750 |
|
|
354,848 |
|
|
|
341,780 |
Depreciation |
|
5,568 |
|
|
5,590 |
|
|
17,074 |
|
|
|
16,635 |
Gross
profit |
|
53,784 |
|
|
52,216 |
|
|
147,233 |
|
|
|
147,553 |
Selling, general and administrative expenses |
|
41,590 |
|
|
39,221 |
|
|
124,303 |
|
|
|
118,579 |
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
— |
|
|
289 |
|
|
|
— |
Legal settlement and insurance recoveries, net |
|
— |
|
|
— |
|
|
(994 |
) |
|
|
1,030 |
Research and engineering |
|
450 |
|
|
595 |
|
|
1,523 |
|
|
|
1,942 |
Depreciation and amortization |
|
2,629 |
|
|
2,918 |
|
|
8,058 |
|
|
|
9,070 |
Acquisition-related expense,
net |
|
1 |
|
|
246 |
|
|
63 |
|
|
|
1,068 |
Income from
operations |
|
9,114 |
|
|
9,236 |
|
|
13,991 |
|
|
|
15,864 |
Interest expense |
|
2,735 |
|
|
2,326 |
|
|
6,790 |
|
|
|
8,694 |
Income before
provision for income taxes |
|
6,379 |
|
|
6,910 |
|
|
7,201 |
|
|
|
7,170 |
Provision for income taxes |
|
1,985 |
|
|
3,513 |
|
|
3,494 |
|
|
|
3,187 |
Net
Income |
|
4,394 |
|
|
3,397 |
|
|
3,707 |
|
|
|
3,983 |
Less: net income attributable to noncontrolling interests, net of
taxes |
|
21 |
|
|
17 |
|
|
54 |
|
|
|
28 |
Net Income
attributable to Mistras Group, Inc. |
$ |
4,373 |
|
$ |
3,380 |
|
$ |
3,653 |
|
|
$ |
3,955 |
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
$ |
0.11 |
|
$ |
0.12 |
|
|
$ |
0.13 |
Diluted |
$ |
0.14 |
|
$ |
0.11 |
|
$ |
0.12 |
|
|
$ |
0.13 |
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
29,965 |
|
|
29,619 |
|
|
29,879 |
|
|
|
29,550 |
Diluted |
|
30,245 |
|
|
30,127 |
|
|
30,209 |
|
|
|
30,093 |
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
|
|
|
|
|
|
Services |
$ |
152,778 |
|
|
$ |
144,976 |
|
|
$ |
435,251 |
|
|
$ |
414,251 |
|
International |
|
25,693 |
|
|
|
29,100 |
|
|
|
83,441 |
|
|
|
88,699 |
|
Products and Systems |
|
3,078 |
|
|
|
3,308 |
|
|
|
8,666 |
|
|
|
9,499 |
|
Corporate and eliminations |
|
(3,087 |
) |
|
|
(2,828 |
) |
|
|
(8,203 |
) |
|
|
(6,481 |
) |
|
$ |
178,462 |
|
|
$ |
174,556 |
|
|
$ |
519,155 |
|
|
$ |
505,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Gross
profit |
|
|
|
|
|
|
|
Services |
$ |
44,869 |
|
|
$ |
41,749 |
|
|
$ |
118,348 |
|
|
$ |
116,587 |
|
International |
|
7,694 |
|
|
|
9,038 |
|
|
|
25,324 |
|
|
|
26,278 |
|
Products and Systems |
|
1,189 |
|
|
|
1,422 |
|
|
|
3,514 |
|
|
|
4,655 |
|
Corporate and eliminations |
|
32 |
|
|
|
7 |
|
|
|
47 |
|
|
|
33 |
|
|
$ |
53,784 |
|
|
$ |
52,216 |
|
|
$ |
147,233 |
|
|
$ |
147,553 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Revenues by
Category(in thousands)
Revenue by industry was as follows:
Three Months Ended
September 30, 2022 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
90,578 |
|
$ |
6,418 |
|
$ |
35 |
|
$ |
— |
|
|
$ |
97,031 |
Aerospace & Defense |
|
16,784 |
|
|
4,397 |
|
|
112 |
|
|
— |
|
|
|
21,293 |
Industrials |
|
9,728 |
|
|
5,834 |
|
|
436 |
|
|
— |
|
|
|
15,998 |
Power generation &
Transmission |
|
10,378 |
|
|
1,946 |
|
|
456 |
|
|
— |
|
|
|
12,780 |
Other Process Industries |
|
10,283 |
|
|
3,033 |
|
|
8 |
|
|
— |
|
|
|
13,324 |
Infrastructure, Research &
Engineering |
|
4,936 |
|
|
1,784 |
|
|
1,150 |
|
|
— |
|
|
|
7,870 |
Petrochemical |
|
3,427 |
|
|
280 |
|
|
— |
|
|
— |
|
|
|
3,707 |
Other |
|
6,664 |
|
|
2,001 |
|
|
881 |
|
|
(3,087 |
) |
|
|
6,459 |
Total |
$ |
152,778 |
|
$ |
25,693 |
|
$ |
3,078 |
|
$ |
(3,087 |
) |
|
$ |
178,462 |
Three Months Ended
September 30, 2021 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
83,534 |
|
$ |
8,548 |
|
$ |
370 |
|
$ |
— |
|
|
$ |
92,452 |
Aerospace & Defense |
|
12,717 |
|
|
3,897 |
|
|
101 |
|
|
— |
|
|
|
16,715 |
Industrials |
|
10,560 |
|
|
6,693 |
|
|
336 |
|
|
— |
|
|
|
17,589 |
Power generation &
Transmission |
|
11,412 |
|
|
2,615 |
|
|
660 |
|
|
— |
|
|
|
14,687 |
Other Process Industries |
|
8,819 |
|
|
3,035 |
|
|
32 |
|
|
— |
|
|
|
11,886 |
Infrastructure, Research &
Engineering |
|
7,136 |
|
|
2,467 |
|
|
808 |
|
|
— |
|
|
|
10,411 |
Petrochemical |
|
4,974 |
|
|
72 |
|
|
— |
|
|
— |
|
|
|
5,046 |
Other |
|
5,824 |
|
|
1,773 |
|
|
1,001 |
|
|
(2,828 |
) |
|
|
5,770 |
Total |
$ |
144,976 |
|
$ |
29,100 |
|
$ |
3,308 |
|
$ |
(2,828 |
) |
|
$ |
174,556 |
Nine Months Ended
September 30, 2022 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
270,289 |
|
$ |
22,018 |
|
$ |
212 |
|
$ |
— |
|
|
$ |
292,519 |
Aerospace & Defense |
|
49,106 |
|
|
14,455 |
|
|
246 |
|
|
— |
|
|
|
63,807 |
Industrials |
|
28,529 |
|
|
17,868 |
|
|
1,271 |
|
|
— |
|
|
|
47,668 |
Power generation &
Transmission |
|
22,578 |
|
|
6,505 |
|
|
1,979 |
|
|
— |
|
|
|
31,062 |
Other Process Industries |
|
32,217 |
|
|
10,305 |
|
|
23 |
|
|
— |
|
|
|
42,545 |
Infrastructure, Research &
Engineering |
|
10,625 |
|
|
6,016 |
|
|
2,489 |
|
|
— |
|
|
|
19,130 |
Petrochemical |
|
10,056 |
|
|
413 |
|
|
— |
|
|
— |
|
|
|
10,469 |
Other |
|
11,851 |
|
|
5,861 |
|
|
2,446 |
|
|
(8,203 |
) |
|
|
11,955 |
Total |
$ |
435,251 |
|
$ |
83,441 |
|
$ |
8,666 |
|
$ |
(8,203 |
) |
|
$ |
519,155 |
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2021 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
248,584 |
|
$ |
26,017 |
|
$ |
638 |
|
$ |
— |
|
|
$ |
275,239 |
Aerospace & Defense |
|
37,319 |
|
|
12,341 |
|
|
165 |
|
|
— |
|
|
|
49,825 |
Industrials |
|
30,621 |
|
|
17,736 |
|
|
1,081 |
|
|
— |
|
|
|
49,438 |
Power generation &
Transmission |
|
27,019 |
|
|
7,776 |
|
|
2,249 |
|
|
— |
|
|
|
37,044 |
Other Process Industries |
|
27,031 |
|
|
9,574 |
|
|
76 |
|
|
— |
|
|
|
36,681 |
Infrastructure, Research &
Engineering |
|
15,479 |
|
|
9,477 |
|
|
2,777 |
|
|
— |
|
|
|
27,733 |
Petrochemical |
|
16,375 |
|
|
191 |
|
|
— |
|
|
— |
|
|
|
16,566 |
Other |
|
11,823 |
|
|
5,587 |
|
|
2,513 |
|
|
(6,481 |
) |
|
|
13,442 |
Total |
$ |
414,251 |
|
$ |
88,699 |
|
$ |
9,499 |
|
$ |
(6,481 |
) |
|
$ |
505,968 |
Revenue by Oil & Gas Sub-category was as follows:
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Oil and Gas Revenue by
sub-category |
|
|
|
|
|
|
|
Upstream |
$ |
36,328 |
|
32,793 |
|
117,436 |
|
102,923 |
Midstream |
|
28,925 |
|
30,232 |
|
86,781 |
|
82,467 |
Downstream |
|
31,778 |
|
29,427 |
|
88,302 |
|
89,849 |
Total |
$ |
97,031 |
|
92,452 |
|
292,519 |
|
275,239 |
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofSegment and Total Company Income (Loss) from
Operations (GAAP) to Income before Special Items
(non-GAAP)(in thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Services: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
16,700 |
|
|
$ |
16,085 |
|
|
$ |
35,315 |
|
|
$ |
38,991 |
|
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
— |
|
|
|
289 |
|
|
|
— |
|
Reorganization and other costs |
|
12 |
|
|
|
— |
|
|
|
40 |
|
|
|
97 |
|
Legal settlement and insurance recoveries, net |
|
— |
|
|
|
— |
|
|
|
(841 |
) |
|
|
1,650 |
|
Acquisition-related expense, net |
|
— |
|
|
|
246 |
|
|
|
45 |
|
|
|
1,034 |
|
Income from operations before special items (non-GAAP) |
$ |
16,712 |
|
|
$ |
16,331 |
|
|
$ |
34,848 |
|
|
$ |
41,772 |
|
International: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
814 |
|
|
$ |
1,169 |
|
|
$ |
2,678 |
|
|
$ |
2,158 |
|
Reorganization and other costs |
|
(15 |
) |
|
|
(2 |
) |
|
|
(114 |
) |
|
|
124 |
|
Income from operations before special items (non-GAAP) |
$ |
799 |
|
|
$ |
1,167 |
|
|
$ |
2,564 |
|
|
$ |
2,282 |
|
Products and
Systems: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(333 |
) |
|
$ |
(281 |
) |
|
$ |
(1,334 |
) |
|
$ |
(653 |
) |
Reorganization and other costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27 |
|
Loss from operations before special items (non-GAAP) |
$ |
(333 |
) |
|
$ |
(281 |
) |
|
$ |
(1,334 |
) |
|
$ |
(626 |
) |
Corporate and
Eliminations: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(8,067 |
) |
|
$ |
(7,737 |
) |
|
$ |
(22,668 |
) |
|
$ |
(24,632 |
) |
Loss on debt modification |
|
693 |
|
|
|
— |
|
|
|
693 |
|
|
|
278 |
|
Legal settlement and insurance recoveries, net |
|
— |
|
|
|
— |
|
|
|
(153 |
) |
|
|
(620 |
) |
Reorganization and other costs |
|
133 |
|
|
|
— |
|
|
|
139 |
|
|
|
— |
|
Acquisition-related expense, net |
|
1 |
|
|
|
— |
|
|
|
19 |
|
|
|
34 |
|
Loss from operations before special items (non-GAAP) |
$ |
(7,240 |
) |
|
$ |
(7,737 |
) |
|
$ |
(21,970 |
) |
|
$ |
(24,940 |
) |
Total
Company: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
9,114 |
|
|
$ |
9,236 |
|
|
$ |
13,991 |
|
|
$ |
15,864 |
|
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
— |
|
|
|
289 |
|
|
|
— |
|
Reorganization and other costs |
|
130 |
|
|
|
(2 |
) |
|
|
65 |
|
|
|
248 |
|
Loss on debt modification |
|
693 |
|
|
|
— |
|
|
|
693 |
|
|
|
278 |
|
Legal settlement and insurance recoveries, net |
|
— |
|
|
|
— |
|
|
|
(994 |
) |
|
|
1,030 |
|
Acquisition-related expense, net |
|
1 |
|
|
|
246 |
|
|
|
64 |
|
|
|
1,068 |
|
Income from operations before special items (non-GAAP) |
$ |
9,938 |
|
|
$ |
9,480 |
|
|
$ |
14,108 |
|
|
$ |
18,488 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Summary Cash Flow
Information(in thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by (used
in): |
|
|
|
|
|
|
|
Operating activities |
$ |
2,722 |
|
|
$ |
4,343 |
|
|
$ |
10,531 |
|
|
$ |
22,469 |
|
Investing activities |
|
(2,378 |
) |
|
|
(5,176 |
) |
|
|
(8,877 |
) |
|
|
(15,494 |
) |
Financing activities |
|
303 |
|
|
|
4,104 |
|
|
|
(4,753 |
) |
|
|
(8,866 |
) |
Effect of exchange rate changes on cash |
|
(1,172 |
) |
|
|
(616 |
) |
|
|
(2,927 |
) |
|
|
(1,272 |
) |
Net change in cash and cash
equivalents |
$ |
(525 |
) |
|
$ |
2,655 |
|
|
$ |
(6,026 |
) |
|
$ |
(3,163 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP) |
$ |
2,722 |
|
|
$ |
4,343 |
|
|
$ |
10,531 |
|
|
$ |
22,469 |
|
Less: |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(2,358 |
) |
|
|
(4,942 |
) |
|
|
(9,050 |
) |
|
|
(15,130 |
) |
Purchases of intangible assets |
|
(181 |
) |
|
|
(269 |
) |
|
|
(580 |
) |
|
|
(887 |
) |
Free cash flow
(non-GAAP) |
$ |
183 |
|
|
$ |
(868 |
) |
|
$ |
901 |
|
|
$ |
6,452 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)(in
thousands)
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
|
|
|
Current portion of long-term debt |
|
$ |
7,365 |
|
|
$ |
20,162 |
|
Long-term debt, net of current
portion |
|
|
193,847 |
|
|
|
182,403 |
|
Total Gross Debt (GAAP) |
|
|
201,212 |
|
|
|
202,565 |
|
Less: Cash and cash
equivalents |
|
|
(18,084 |
) |
|
|
(24,110 |
) |
Total Net Debt (non-GAAP) |
|
$ |
183,128 |
|
|
$ |
178,455 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Income (GAAP) to Adjusted EBITDA (non-GAAP)(in
thousands)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
Net Income
(GAAP) |
$ |
4,394 |
|
|
$ |
3,397 |
|
|
$ |
3,707 |
|
|
$ |
3,983 |
Less: Net income attributable to non-controlling interests, net of
taxes |
|
21 |
|
|
|
17 |
|
|
|
54 |
|
|
|
28 |
Net Income
attributable to Mistras Group, Inc. |
$ |
4,373 |
|
|
$ |
3,380 |
|
|
$ |
3,653 |
|
|
$ |
3,955 |
Interest expense |
|
2,735 |
|
|
|
2,326 |
|
|
|
6,790 |
|
|
|
8,694 |
Provision for income taxes |
|
1,985 |
|
|
|
3,513 |
|
|
|
3,494 |
|
|
|
3,187 |
Depreciation and amortization |
|
8,197 |
|
|
|
8,508 |
|
|
|
25,132 |
|
|
|
25,705 |
Share-based compensation expense |
|
1,396 |
|
|
|
1,452 |
|
|
|
4,166 |
|
|
|
3,916 |
Acquisition-related expense |
|
1 |
|
|
|
246 |
|
|
|
63 |
|
|
|
1,068 |
Reorganization and other related costs (benefit), net |
|
130 |
|
|
|
(2 |
) |
|
|
65 |
|
|
|
248 |
Legal settlement and insurance recoveries, net |
|
— |
|
|
|
— |
|
|
|
(994 |
) |
|
|
1,030 |
Loss on debt modification |
|
693 |
|
|
|
— |
|
|
|
693 |
|
|
|
278 |
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
— |
|
|
|
289 |
|
|
|
— |
Foreign exchange (gain) loss |
|
(928 |
) |
|
|
(587 |
) |
|
|
(924 |
) |
|
|
366 |
Adjusted EBITDA
(non-GAAP) |
$ |
18,582 |
|
|
$ |
18,836 |
|
|
$ |
42,427 |
|
|
$ |
48,447 |
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (GAAP) and Diluted EPS (GAAP) to Net
Income Excluding Special Items (non-GAAP) and
Diluted EPS Excluding Special Items (non-GAAP)(dollars in
thousands, except per share data)
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
2022 |
|
|
|
2021 |
|
Net income
attributable to Mistras Group, Inc. (GAAP) |
$ |
4,373 |
|
|
$ |
3,380 |
|
|
|
$ |
3,653 |
|
|
$ |
3,955 |
|
Special items |
|
824 |
|
|
|
244 |
|
|
|
|
117 |
|
|
|
2,624 |
|
Tax impact on special items |
|
(188 |
) |
|
|
(59 |
) |
|
|
|
(8 |
) |
|
|
(616 |
) |
Special items, net of tax |
$ |
636 |
|
|
$ |
185 |
|
|
|
$ |
109 |
|
|
$ |
2,008 |
|
Net income
attributable to Mistras Group, Inc. Excluding Special Items
(non-GAAP) |
$ |
5,009 |
|
|
$ |
3,565 |
|
|
|
$ |
3,762 |
|
|
$ |
5,963 |
|
|
|
|
|
|
|
|
|
|
Diluted EPS
(GAAP) |
$ |
0.14 |
|
|
$ |
0.11 |
|
|
|
$ |
0.12 |
|
|
$ |
0.13 |
|
Special items, net of tax |
|
0.02 |
|
|
|
0.01 |
|
|
|
|
— |
|
|
|
0.07 |
|
Diluted EPS Excluding
Special Items (non-GAAP) |
$ |
0.16 |
|
|
$ |
0.12 |
|
|
|
$ |
0.12 |
|
|
$ |
0.20 |
|
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